Pay for Quality
Pay for Quality
Pay for Quality
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24 <strong>Pay</strong> <strong>for</strong> <strong>Quality</strong> KCE Reports 118<br />
Taking into account this complexity and the multiple goals which should be incentivized<br />
simultaneously, leads to the construction of more elaborate P4Q schemes. Some<br />
authors suggest solving this problem by separating the complex calculations, <strong>for</strong>mula<br />
and adjustment procedures from the way in which quality per<strong>for</strong>mance feedback is<br />
provided on the key targets driving the incentive. According to what needs<br />
improvement other presentation methods can be used. Whereas the presentation of<br />
one composite measure, summarizing the per<strong>for</strong>mance on any preferred level, can be<br />
useful <strong>for</strong> general comparisons, the presentation of target specific data in<strong>for</strong>ms the<br />
provider on which targets to centre future quality improvement initiatives and often<br />
also which means can be used to accomplish them 101 , 102 , 103 , 104 , 105 , 106 .<br />
3.2 THE P4Q CONTEXT<br />
Hutchison et al. (in Frolich et al. 2004) point to the importance of considering the<br />
context in which financial incentives are designed or implemented to understand their<br />
potential effects 38 . Indeed, each provider’s ef<strong>for</strong>ts in responding to incentives are<br />
mediated by characteristics of the local market, the medical organisation (if any) in<br />
which he or she practices, individual provider characteristics and on patient<br />
characteristics.<br />
The following contextual aspects will be discussed in this section: the health care<br />
system, the payer-provider relationship (with theoretical grounding), their respective<br />
characteristics, and the patient’s characteristics.<br />
3.2.1 The health care system<br />
Obviously, it is essential that incentive models are congruent with the values of the<br />
health care system. For instance, in Ontario, Custers et al. (2008) adopted 4 principles<br />
that were congruent with the health care system values 75 :<br />
1. Be fiscally prudent (no new money);<br />
2. Be simple to administer (no additional administrative concerns);<br />
3. Support a culture of continuous improvement (no one-shot action);<br />
4. Improve equity in and access to quality of health services.<br />
General aspects of the system include the type of system (insurance or NHS; level of<br />
regionalisation), the public/private mix (% insured), the dominant payment system (fee<br />
<strong>for</strong> service, salary, capitation, etc.) and the level of therapeutic freedom among<br />
providers.<br />
According to Conrad and Christianson (2004), these market and environmental<br />
conditions will, among other things, drive investment in structural quality (medical<br />
equipment, human capital) and could there<strong>for</strong>e be considered as exogenous<br />
determinants of incentive programmes 35 . It can be argued that the market and<br />
environmental characteristics will also drive process and outcomes related aspects of<br />
quality, and hence the success of P4Q programmes.<br />
For instance, the extent of competition between providers may affect their response to<br />
incentives: a provider in a monopoly situation could maximise profits without improving<br />
quality 38 . This level of competition is in its turn related to other healthcare system<br />
characteristics, such as the degree of patients’ free choice to consult with providers of<br />
their own choosing. Although P4Q is not directly related to the patient’s choice of a<br />
provider, the number of providers one patient consults will influence responsibilities’<br />
allocation and the level of care continuity to support high quality healthcare.<br />
Interestingly, the appropriate and timely referring of patients is in several P4Q<br />
programmes a quality target on its own. Furthermore, the level of decision making in<br />
P4Q policy will influence the uni<strong>for</strong>mity, transparency, awareness and general<br />
acceptance of a P4Q programme design. The lower the level, the more risk <strong>for</strong><br />
fragmentation and <strong>for</strong> variously competing approaches. This reduces programme<br />
awareness and acceptance of providers. It also reduces the impact size of the incentive<br />
(the effect of one of many simultaneous programmes, also known as a dilution effect<br />
versus the effect of one national programme).