Recommendation 9: Because electronic health information technology will increase the probability of a successful pay-for-performance program, the Secretary of DHHS should explore a variety of approaches for assisting providers in the implementation of electronic data collection and reporting systems to strengthen the use of consistent performance measures.


Monitoring, evaluation, and research should be integral components of any pay-for-performance program. Issues to be addressed include use of current data to evaluate impact; processes for developing robust performance measures; and development of real-time monitoring systems to identify unintended adverse consequences. A successful pay-for-performance program must also encompass the elements of a true learning system, including having strong leadership, a shared vision, and an environment that allows for action in response to observations.

Recommendation 10: The Secretary of DHHS should implement a monitoring and evaluation system for the Medicare pay-for-performance program in order to:

  • Assess early experiences with implementation so timely corrective action can be taken.

  • Evaluate the overall impact of pay for performance on clinical quality, patient-centeredness, and efficiency.

  • Identify the best practices of high-performing delivery settings that should be shared with others to improve care throughout the nation.

This active learning system should be complemented by a research agenda identified through consensus among the major stakeholders to create the context for future investigations as actual experience raises new questions. Research should also be aimed at building an evidence base to guide the design of future pay-for-performance programs.

Collaboration between the public and private efforts is critical. While multiple stakeholder groups are now developing reliable, valid, and accurate performance metrics in the area of clinical quality, these efforts are not coordinated and often produce competing and inconsistent measures that are burdensome to providers.

CMS should conduct demonstration projects to evaluate different options that are theoretically sound but untested. Such projects could limit risks and accelerate progress in payment realignment by confirming benefits and minimizing the risk of undue hardship for beneficiaries or providers.

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