Rewarding Provider Performance Aligning Incentives in Medicare (2007) / Chapter Skim
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The existing systems do not reflect the relative value of health care services in important aspects of quality, such as clinical quality, patient-centeredness, and efficiency. Nor do current payment systems recognize or reward care coordination, an omission reflected in such shortcomings as the limited focus on prevention and the treatment of chronic conditions as patients move across various care settings.
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STUDY CHARGE AND SCOPE This study is the third in the IOM's Pathways to Quality Health Care series, which offers tools for implementing the vision of improved health care delineated in the Quality Chasm report. The first report in the Pathways series, Performance Measurement: Accelerating Improvement, recommended a strategy for developing and implementing a comprehensive performance measurement system, including creation of a national board to coordinate that effort.
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Therefore, introducing payment incentives to reward high quality in a national health care program requires attention to effects on providers, purchasers, health plans, and consumers. More than 100 reward and incentive payment programs have been launched in the private health care sector.
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For the remaining 12 percent of beneficiaries who have opted to receive their Medicare services from private plans participating in the Medicare Advantage program, Medicare pays a fixed, risk-adjusted monthly amount per beneficiary to the plans, which in turn pay providers via diverse methods. The current Medicare fee-for-service payment system is unlikely to promote quality improvement because it tends to reward excessive use of services; high-cost, complex procedures; and lower-quality care.
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The committee thus reached two key conclusions regarding pay for performance as a new payment strategy for Medicare: The systematic and deliberate use of payment incentives that recognize and reward high levels of quality and quality improvement can serve as a powerful stimulus to drive institutional and provider behavior toward better quality. The incentives introduced by pay for performance, by themselves, will not be sufficient to achieve the broad institutional and behavioral changes needed unless certain operating conditions are met, such as the use of electronic health records, public reporting, beneficiary incentives, and education of boards of directors, which could lead to significant and synergistic gains in quality improvement.
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to comply with new reporting and payment procedures. If payment incentives are not carefully aligned with desired outcomes or if adequate resources or risk adjustments are not readily available, some providers may avoid accepting patients whose conditions could jeopardize their performance rating.
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· Congress should create provider-specific pools from a reduction in the base Medicare payments for each class of providers (hos pitals, skilled nursing facilities, Medicare Advantage plans, di alysis facilities, home health agencies, and physicians)
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The feasibility of using other funding sources, particularly the generated-savings model, should be tested and evaluated over the next 35 years to assess the likely impacts and consequences. One of the primary goals of new payment incentives should be to stimulate collaboration and shared accountability among providers across care settings for better patient-centered health outcomes.
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Similarly, many purchasers and public officials are concerned that focusing on enhancing clinical quality or patient-centered care will not adequately address concerns about the growing costs of health services or reduce current waste and inefficiencies. To create new payment incentives that can foster overall quality improvement and better patient outcomes, the committee consolidated the six quality aims of the Quality Chasm report into three domains -- clinical quality, patient-centered care, and efficiency.
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However, payment incentives are necessary as a key stimulus to foster widespread public reporting. Recommendation 6: Because public reporting of performance mea sures should be an integral component of a pay-for-performance program for Medicare, the Secretary of DHHS should offer incen tives to providers for the submission of performance data, and ensure that information pertaining to provider performance is
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However, it also recognized that the pace of implementation, the breadth of measure sets applicable to specific types of providers, and the size and distribution of reward pools would need to vary depending on the availability of measures and the organizational and technological challenges faced by different providers in carrying out performance measurement and reporting. Many types of Medicare providers, including hospitals, home health agencies, and Medicare Advantage plans, are already submitting performance data for public reporting.
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In establishing the size of the reward pools proposed above, CMS will need to strike a balance between providing financial incentives sizable enough to lead to near-universal participation and recognizing that initial measure sets are narrow, presenting an incomplete picture of a provider's performance. The transformational changes in the health care delivery system envisioned in the Pathways series of reports will depend upon the adoption of both longitudinal measures of quality that cut across settings and payment rewards that are substantial.
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pay for and reward successful care coordination that meets specified standards for pro viders who take on that role. Not all providers treating Medicare beneficiaries would be willing or able to provide this coordinating function; thus CMS should design a strategy to reward those who are capable of and willing to assume this role.
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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.
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