Pay for Quality

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24 Pay for Quality KCE Reports 118 Taking into account this complexity and the multiple goals which should be incentivized simultaneously, leads to the construction of more elaborate P4Q schemes. Some authors suggest solving this problem by separating the complex calculations, formula and adjustment procedures from the way in which quality performance feedback is provided on the key targets driving the incentive. According to what needs improvement other presentation methods can be used. Whereas the presentation of one composite measure, summarizing the performance on any preferred level, can be useful for general comparisons, the presentation of target specific data informs the provider on which targets to centre future quality improvement initiatives and often also which means can be used to accomplish them 101 , 102 , 103 , 104 , 105 , 106 . 3.2 THE P4Q CONTEXT Hutchison et al. (in Frolich et al. 2004) point to the importance of considering the context in which financial incentives are designed or implemented to understand their potential effects 38 . Indeed, each provider’s efforts in responding to incentives are mediated by characteristics of the local market, the medical organisation (if any) in which he or she practices, individual provider characteristics and on patient characteristics. The following contextual aspects will be discussed in this section: the health care system, the payer-provider relationship (with theoretical grounding), their respective characteristics, and the patient’s characteristics. 3.2.1 The health care system Obviously, it is essential that incentive models are congruent with the values of the health care system. For instance, in Ontario, Custers et al. (2008) adopted 4 principles that were congruent with the health care system values 75 : 1. Be fiscally prudent (no new money); 2. Be simple to administer (no additional administrative concerns); 3. Support a culture of continuous improvement (no one-shot action); 4. Improve equity in and access to quality of health services. General aspects of the system include the type of system (insurance or NHS; level of regionalisation), the public/private mix (% insured), the dominant payment system (fee for service, salary, capitation, etc.) and the level of therapeutic freedom among providers. According to Conrad and Christianson (2004), these market and environmental conditions will, among other things, drive investment in structural quality (medical equipment, human capital) and could therefore be considered as exogenous determinants of incentive programmes 35 . It can be argued that the market and environmental characteristics will also drive process and outcomes related aspects of quality, and hence the success of P4Q programmes. For instance, the extent of competition between providers may affect their response to incentives: a provider in a monopoly situation could maximise profits without improving quality 38 . This level of competition is in its turn related to other healthcare system characteristics, such as the degree of patients’ free choice to consult with providers of their own choosing. Although P4Q is not directly related to the patient’s choice of a provider, the number of providers one patient consults will influence responsibilities’ allocation and the level of care continuity to support high quality healthcare. Interestingly, the appropriate and timely referring of patients is in several P4Q programmes a quality target on its own. Furthermore, the level of decision making in P4Q policy will influence the uniformity, transparency, awareness and general acceptance of a P4Q programme design. The lower the level, the more risk for fragmentation and for variously competing approaches. This reduces programme awareness and acceptance of providers. It also reduces the impact size of the incentive (the effect of one of many simultaneous programmes, also known as a dilution effect versus the effect of one national programme).
KCE Reports 118 Pay for Quality 25 Obviously P4Q design on a national level can, as mentioned before, be combined with involvement and local priority setting on other levels. Salary as a general payment system is considered as a volume neutral payment system, and will therefore likely not to have any positive or negative influence on P4Q programmes targeting underuse or overuse. Salary provides mainly sufficient security and a reliable income, but no care quality or quantity incentive. P4Q may add an additional quality stimulus when combined with a dominant salary payment system. Fee For Service as an activity volume driver is likely to combine well with P4Q targets aimed at underuse, but also induces a risk to reduce or even to eliminate the effects of P4Q targets aimed at overuse. Capitation as a patient volume driver, but also per patient cost containment driver, is likely to combine well with P4Q targets aimed at overuse, but also induces a risk to reduce or even to eliminate the effects of P4Q targets aimed at underuse. 3.2.2 The payer-provider relationship 3.2.2.1 Principal-agent theory According to Nahra et al.(2006), the conceptual foundation of providing an incentive to achieve a desired result from the receiver of the incentive can be found within the context of a principal-agent framework 107 . The agency theory describes the relationship between a principal (for instance the insurer or a national health service) and one or more agents (physicians, hospitals,...). Under this theory, a principal must hire agent(s) to carry out an objective that the principal cannot carry out alone. To align the goals of the agent with those of the principal, rather than contracting with the agent solely for the provision of effort, the principal may contract with the agent, at least partially, on a measure of outcome. 108 , 107 . Such part of a contract refers to pay for quality. Hence, principal-agent theory addresses relationships in which 1° both parties have different abilities (and it is therefore desirable that the first party delegates responsibility for performing a function to the second), 2° there is asymmetric information (for instance the insurer cannot monitor all the actions that physicians take), and 3° the parties have –to some extentdifferent goals (or other priorities within the diverse set of quality domains). 38 In the relationship between the principal/payer and the agent/provider the latter can be both a potential ally and a potential source of resistance to P4Q. Regarding resistance, providers may have particular concerns about the quality of the data and the validity of measures created from the data. They can also be very sceptical about data produced by outside stakeholders such as government agencies or employer coalitions. Finally, they are also concerned about their ability to influence many outcomes measures of quality because of the substantial role played by patient actions and preferences (see the discussion above regarding the control of providers over processes of care). 78 In order to avoid the above to some extent, one may implement a voluntary programme wherein not all providers need be ready and willing to participate. However, voluntary programmes will be likely to attract those providers who expect to perform well — usually those that are already performing well — while the poor performers remain on the sideline. 78 3.2.2.2 The payer Several organizational and market mechanisms influence the way a payer can and will implement P4Q 109 . For instance, if there is already an existing policy of clinical guidelines endorsed by the payer, it will be easier to build further on this policy and add a P4Q dimension to it. Also, if a variable patient contribution in function of provider and/or technology performance is already in place, then again, it will be more acceptable to introduce P4Q 35 . In general the inclusion of elements of existing quality incentive schemes obviously will influence the success of a new programme 38 . On the structural side, the availability of management information systems is crucial for the success of P4Q.
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