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Rewarding Provider Performance: Aligning Incentives in Medicare
The distribution of rewards for both improvement and excellence would allow providers at all performance levels to find at least one of these goals within reach. The fraction of rewards allocated to improve on a given measure set should be reduced over time to only reward care that is truly of high performance. As providers make significant improvements on basic measures, the allocation of rewards for those measures should shift in favor of higher payments for more complex indices of performance. Rewards should also shift to reflect progress in the development of new measure sets and changes in priorities. Even when measure sets or priorities are stable, the focus of rewards should be altered to ensure that providers do not focus their performance improvement efforts too narrowly.
CMS will also need to address procedural and technical issues, including the following:
The procedures by which comparative information on provider performance will be released to the public.
Ways of overcoming the barriers to participation.
The process of improving care coordination among providers serving the same patient.
The role of information technology use in supporting better care delivery and a performance-based payment strategy.
Public Reporting and Transparency
Beyond merely collecting data on provider performance, CMS should make such data publicly available so that consumers will have the opportunity to fully characterize the performance of providers when making health care decisions. Public disclosure of information, with necessary patient protections, can also stimulate higher levels of quality by showing providers how their performance compares with that of their peers. While the evidence remains mixed, peer comparisons may be a more powerful force than monetary incentives in encouraging providers to adopt practices that improve quality of care. However, payment incentives are necessary as a key stimulus to foster widespread public reporting.
Recommendation 6: Because public reporting of performance measures should be an integral component of a pay-for-performanceprogram for Medicare, the Secretary of DHHS should offer incentives to providers for the submission of performance data, andensure that information pertaining to provider performance is