Wednesday, May 5, 2010

Pay For Performance: A Good Thing If It Is Done Right

One of the outcomes of healthcare reform is the promotion of pay for performance (P4P) systems. Essentially these reward hospitals and physicians that provide great value, that is high quality care delivered cost effectively. This is a good thing and something necessary for the future survival of our healthcare delivery system. But we can't allow healthcare providers to be incentivized for gaming the system.

A recent study out of Johns Hopkins found that physicians have more incentive to delay or even pass on treating obese patients in need of gallbladder or appendix surgery because that are statistically more likely to experience complications than their non-obese patients. And the P4P systems do not adequately adjust for case complexity of dealing with these types of patients. The social ramifications of this are that African-American and lower income patients will be disproportionately affected because they have higher rates of obesity.

This study was based on the review of 35,000 insurance claims for gallbladder patients and 6,800 claims for appendectomy patients between 2002 and 2008. Obesity is clearly the most prevalent co-morbidity that skews outcomes.

A RAND Corporation study reached a similar conclusion in a review of primary care physicians in Massachusetts. A typical physician serving the highest proportion of medically vulnerable patients, received about $7,000 less each year under a P4P model.

Any pay for performance system must adequately adjust for the complexity of medically vulnerable patients. Obesity is the most common such factor. That being said, we must also at some point hold patients accountable for life style decisions. A physician or hospital should not be penalized for treating an obese patient over a healthier one. Worse yet they should not be incentivized to pass on providing care to such patients. Any P4P system must recognize and pay additional for legitimate complicating conditions, obesity being the most common one. At the same time there should be incentives set up for patients to start living healthier. These may ultimately have to be replaced by penalties on patients who refuse to comply with basic standards. I am all for access to healthcare for everyone. But along with that comes some level of responsibility for yourself.

More on this later.

Mark Brodeur

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