Pay for Quality
Pay for Quality
Pay for Quality
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KCE Reports 118 <strong>Pay</strong> <strong>for</strong> <strong>Quality</strong> 101<br />
6.2.3.2 Incentives<br />
Size<br />
Different incentive structures are being used. The UK makes only use of financial<br />
rewards and approximately 25% of the practitioner’s income is generated by the QOF.<br />
This large investment has led to improvements in quality. However it remains unclear<br />
whether the quality improvement seen to date was worth the investment.<br />
The US makes use of both financial rewards (bonuses) and withholds. In the US the<br />
incentive size ranges between 2 and 10% of the payments, however only 10 to 20% of<br />
the payers are involved, consequently 1 or 2% of provider’s income are generated from<br />
P4Q schemes, leading to a dilution effect. Another example of an incentive is based on<br />
the difference in per<strong>for</strong>mance measure between different health plans in counties with<br />
more than one health plan, as assessed by Medicaid. Initially, when there was not as<br />
much money to pay bonuses, new Medicaid enrolees who did not select a health plan<br />
would be assigned to a better per<strong>for</strong>ming health plan at a ratio that reflect the quality of<br />
that plan in comparison to other plans. This is a financial incentive in the sense that<br />
there is financial gain <strong>for</strong> the organization having people come to their plan. Withholds<br />
are mostly used when programmes have to be budget neutral. The difference between a<br />
bonus and a withhold is somewhat semantic in the US. A withhold mostly consist of<br />
giving only a part of the money physicians or hospitals normally get. The remaining part<br />
is only being given if physicians or hospitals per<strong>for</strong>ming well. It can be interpreted as a<br />
withhold in the sense that physicians and hospitals were expecting to get that money. A<br />
withhold can also consist of ‘shared savings’, <strong>for</strong> example to reduce overuse. When<br />
healthcare overuse can be reduced, costs and consequently the physician’s income will<br />
also diminish, subsequently this saved amount of money is being divided between<br />
government and physicians, so physicians lose only half of the original reduction of<br />
income. Finally, another kind of withhold is being used in a hospital care P4Q related<br />
system by CMS concerning preventable complications. When hospitals submit their bill<br />
(consisting of all diagnoses a patient has had at discharge), the potentially avoidable<br />
complications can’t be included in the list of diagnoses. In this context it should be<br />
noted, that it is advised to develop audit systems to select fraud.<br />
In the UK, the P4Q system is not competitive. In the US on the contrary, P4Q systems<br />
are often competitive. According to one UK expert there is no justification <strong>for</strong><br />
competition, rewards should relate to the levels of per<strong>for</strong>mance.<br />
In the Australian P4Q programmes discussed above, incentives are presented as financial<br />
rewards.<br />
In the Netherlands the P4Q pilot programme also only make use of bonuses, although as<br />
a consequence of the limited budget, insurances have difficulties to pay out these<br />
bonuses. As a result of the new insurance law a new payment system based on the<br />
delivered quality is in development. It is not yet clear how this new payment system will<br />
be organized and if the modalities of the above discussed pilot project will be<br />
incorporated.<br />
Some experts (US, UK, NL, AUS) argue that the incentive size in the US is probably too<br />
small and the size in the UK is too high. According to the experts the ideal incentive<br />
size should range between 5% and 25% of physicians income. An incentive that is too<br />
high could provoke gaming effects, an incentive that is too low on the other hand could<br />
limit the impact in terms of quality improvement.<br />
Target<br />
In the UK practices are owned by groups of GPs and QOF incentives are targeted at<br />
the practice level. The GP team can decide to invest the incentive in the practice and<br />
hence trying to improve quality even more or to divide the incentive between GPs. The<br />
hospital P4Q demonstration project which has been implemented recently in the North<br />
West region of the UK, targets its incentives at the department. In the US, team care<br />
almost doesn’t exist, there<strong>for</strong>e payments are often targeted at the individual. However,<br />
in the Cali<strong>for</strong>nian IHA <strong>for</strong> example, project payments are made to very large<br />
multidisciplinary medical groups.