Pay for Performance Proceeds at Proper Pace

Change comes at all speeds, but for the sake of this discussion, let us consider two: slow and fast. Our cover story concerns incremental change. Contributing Editor MargaretAnn Cross focuses on three national pay-for-performance programs that are innovative and substantial. They are efforts by the Centers for Medicare & Medicaid Services, the Integrated Healthcare Association, and Bridges to Excellence.

They show promise for improving outcomes and cutting cost, but we must temper our enthusiasm, because these are essentially building blocks in the slow construction of a national P4P system, and there remain a lot of questions about whether this will be anything more than a minor adjustment to the system. Indeed, some physicians are dismissive of the whole idea, and some commentators argue that the movement could even have an overall negative effect. If all providers are given a pay incentive, what’s the point? If some don’t qualify, should we be using them at all? Is mediocrity in medicine acceptable?

Then there’s fast change, as seen in Medicare private fee-for-service plans. Turn our backs for just one minute and the next thing you know, the fastest growing Medicare Advantage option in the country is one that seems barely managed at all. Everybody likes PFFS: doctors, who get paid more than in other Medicare programs; health plans, because they get a lot of money from CMS; and beneficiaries, who enjoy access to services, even if they are not thrilled by the balance billing. (As we were going to press, an advocacy group called the Medicare Rights Center issued a report saying that PFFS enrollees are not getting the sort of benefits that they thought they’d get. Backlash alert!)

Still, we doubt the long-term viability of PFFS plans, because what makes them so successful is spending that’s oblivious to demography. The incrementalist P4P will be with us long after Medicare PFFS is history.

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