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> 25<br />
Obviously P4Q design on a national level can, as mentioned be<strong>for</strong>e, be combined with<br />
involvement and local priority setting on other levels.<br />
Salary as a general payment system is considered as a volume neutral payment system,<br />
and will there<strong>for</strong>e likely not to have any positive or negative influence on P4Q<br />
programmes targeting underuse or overuse. Salary provides mainly sufficient security<br />
and a reliable income, but no care quality or quantity incentive. P4Q may add an<br />
additional quality stimulus when combined with a dominant salary payment system. Fee<br />
For Service as an activity volume driver is likely to combine well with P4Q targets<br />
aimed at underuse, but also induces a risk to reduce or even to eliminate the effects of<br />
P4Q targets aimed at overuse. Capitation as a patient volume driver, but also per<br />
patient cost containment driver, is likely to combine well with P4Q targets aimed at<br />
overuse, but also induces a risk to reduce or even to eliminate the effects of P4Q<br />
targets aimed at underuse.<br />
3.2.2 The payer-provider relationship<br />
3.2.2.1 Principal-agent theory<br />
According to Nahra et al.(2006), the conceptual foundation of providing an incentive to<br />
achieve a desired result from the receiver of the incentive can be found within the<br />
context of a principal-agent framework 107 . The agency theory describes the relationship<br />
between a principal (<strong>for</strong> instance the insurer or a national health service) and one or<br />
more agents (physicians, hospitals,...).<br />
Under this theory, a principal must hire agent(s) to carry out an objective that the<br />
principal cannot carry out alone. To align the goals of the agent with those of the<br />
principal, rather than contracting with the agent solely <strong>for</strong> the provision of ef<strong>for</strong>t, the<br />
principal may contract with the agent, at least partially, on a measure of outcome. 108 , 107 .<br />
Such part of a contract refers to pay <strong>for</strong> quality. Hence, principal-agent theory<br />
addresses relationships in which 1° both parties have different abilities (and it is<br />
there<strong>for</strong>e desirable that the first party delegates responsibility <strong>for</strong> per<strong>for</strong>ming a function<br />
to the second), 2° there is asymmetric in<strong>for</strong>mation (<strong>for</strong> instance the insurer cannot<br />
monitor all the actions that physicians take), and 3° the parties have –to some extentdifferent<br />
goals (or other priorities within the diverse set of quality domains). 38<br />
In the relationship between the principal/payer and the agent/provider the latter can be<br />
both a potential ally and a potential source of resistance to P4Q. Regarding resistance,<br />
providers may have particular concerns about the quality of the data and the validity of<br />
measures created from the data.<br />
They can also be very sceptical about data produced by outside stakeholders such as<br />
government agencies or employer coalitions. Finally, they are also concerned about<br />
their ability to influence many outcomes measures of quality because of the substantial<br />
role played by patient actions and preferences (see the discussion above regarding the<br />
control of providers over processes of care). 78<br />
In order to avoid the above to some extent, one may implement a voluntary<br />
programme wherein not all providers need be ready and willing to participate.<br />
However, voluntary programmes will be likely to attract those providers who expect to<br />
per<strong>for</strong>m well — usually those that are already per<strong>for</strong>ming well — while the poor<br />
per<strong>for</strong>mers remain on the sideline. 78<br />
3.2.2.2 The payer<br />
Several organizational and market mechanisms influence the way a payer can and will<br />
implement P4Q 109 . For instance, if there is already an existing policy of clinical<br />
guidelines endorsed by the payer, it will be easier to build further on this policy and add<br />
a P4Q dimension to it. Also, if a variable patient contribution in function of provider<br />
and/or technology per<strong>for</strong>mance is already in place, then again, it will be more acceptable<br />
to introduce P4Q 35 . In general the inclusion of elements of existing quality incentive<br />
schemes obviously will influence the success of a new programme 38 .<br />
On the structural side, the availability of management in<strong>for</strong>mation systems is crucial <strong>for</strong><br />
the success of P4Q.