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> 33<br />
Key points<br />
• P4Q programmes are intended to offer explicit financial incentives to<br />
providers in order to achieve predefined quality targets. <strong>Quality</strong> goes further<br />
than the strict clinical outcome. It includes 7 dimensions: safety, clinical<br />
effectiveness, patient centeredness, timeliness, equity of care, efficiency of<br />
care and continuous and integrative care b . Furthermore quality can be<br />
expressed in structural, process and outcome quality criteria. Many P4Q<br />
programmes focus mainly on structure and process outcomes. However,<br />
given the scarcely grounded relationship between process measures and<br />
long term patient outcome measures, overly relying on structure and<br />
process outcomes threatens the credibility of a P4Q programme. As<br />
important as the choice of criteria is the final number of criteria. Too few<br />
criteria could draw the attention of providers away from the not<br />
incentivized criteria. Too many criteria could lead to organisational<br />
complexity. When setting these criteria, it is important to verify that the<br />
criteria are measurable. A valid and comprehensive management<br />
in<strong>for</strong>mation system to track per<strong>for</strong>mance against the goals must be<br />
available. Correct measurement makes use of risk adjustment. Some P4Q<br />
programmes make use of exception reporting. Gaming, patient selection<br />
and diversion of attention are the most important types of unintended<br />
consequences.<br />
• Financial incentives are considered as the core of a P4Q programme.<br />
Several possible incentives structures are possible: bonuses, per<strong>for</strong>mance<br />
based fee schedule, per<strong>for</strong>mance based withholds, regular payment increase<br />
linked to per<strong>for</strong>mance and quality grants/financial awards/per<strong>for</strong>mance<br />
funds. There is still some disagreement amongst researchers about whether<br />
bonuses or penalties should be applied. Most programmes make use of<br />
bonuses whereby ideally, an incentive size should amount up to 5% of<br />
income and according to some authors even up to 10% of income. The<br />
<strong>for</strong>mulation of the incentive arrangement is of importance. Rewarding a<br />
threshold could discourage low-quality providers to engage in the P4Q<br />
programme. P4Q programmes often provide payment only on one or a few<br />
fixed time points. Some P4Q programmes attach payment weights to<br />
specific quality targets as a function of the estimated related workload, or to<br />
express the relative importance of a target in terms of public health. Some<br />
P4Q programmes make use of an absolute reward whereby anyone who<br />
per<strong>for</strong>ms well obtains the reward no matter how the other providers<br />
per<strong>for</strong>m. Other P4Q programmes use a ‘tournament approach’, where<br />
providers compete against one another. The latter method has the<br />
advantage that the expenses are more under control, however the<br />
uncertainty about what can be achieved could provoke providers not to<br />
engage in the programme. Finally, a balance should be found between the<br />
simplicity of the programme on the one hand and sufficient attention <strong>for</strong> all<br />
the issues related to P4Q complexity on the other hand.<br />
• Health care, payer, provider and patient characteristics are the main<br />
contextual factors and are of influence in various ways. Not taking these<br />
factors into account will compromise the success of a possible P4Q<br />
programme.<br />
• Several market and environmental characteristics, like the private/public<br />
mix, the dominant payment system, the level of competition and the level of<br />
therapeutic freedom among providers, can drive quality, and thus P4Q<br />
success.<br />
b <strong>Quality</strong> on a global level also involves reducing variability in care