UBMD

UBMD’s practice plans are preparing for a new concept in health care that’s coming to Western New York—and the rest of the nation—as Medicare moves forward on a plan to provide physicians financial incentives for following specific health care guidelines to improve patient outcomes and reduce health care costs.

Pay for performance—or simply P4P—is a health care concept in which practices earn payment back from saved health care costs if they’re able to prove they’ve met a certain threshold in terms of improving patient health. A national rollout of the program is expected to take place sometime after the conclusion of a major, four-year trial of the plan—sponsored by the Centers for Medicare and Medicaid Services and involving 10 major physicians groups—in March 2009.

Examples of measures physicians might be required to recommend to their patients in order to participate in P4P include prescribing beta-blockers for patients with congestive heart failure, or foot and eye exams for diabetics.

“Philosophically, it’s a good idea,” says Chester Fox of UB Family Medicine. “It’s economics 101. If you pay for patient volume, which is what Medicare pays for now, and process, then you get a lot of volume and a lot of process. If they pay for quality, they’re hoping that they can improve quality.”

But he says the plan presents physicians a number of challenges as well. In order to earn the payment incentives offered by P4P, Fox says physicians must be prepared to invest a significant amount up front in order to update office systems—by hiring extra staff or switching to electronic health records (EHRs)—since P4P requires in-depth information on patients’ medical histories to determine which practices have earned bonuses.

“If there’s a lot of money involved, then everyone’s going to want to make their practices meet the requirements,” says Peter Winkelstein of UB Pediatrics, who serves as chair of the electronic health record subcommittee and co-chair of the IT committee for the UBMD management council.

“To me, the most important thing about P4P is that it’s going to drive the adoption of electronic health records,” he adds. “We’ve just gone through an extensive, year-long vendor selection process for an electronic health record and one of the selection criteria was that the product be able to generate P4P-type reports—as well as even more sophisticated reports that will help support the research mission of the university.”

But even without new technology, Fox says his practice is benefiting from other programs similar to P4P being offered by local insurance providers using only information from billing records—for example, UB Family Medicine received $38,300 in incentive checks from Fidelis Care alone in 2007; so while only 10 percent of his practice’s patient population is Medicare-eligible, he says the stricter guidelines—and hopefully the higher payouts—of P4P is something physicians cannot afford to ignore.

“Medicare is the cultural driver of what happens in health care,” he adds. “Whatever they do, often there’s a trickle-down effect to the insurance companies. When Medicare went to relative value units, all the insurance companies went to relative value units—and most HMO fee schedules are based on some percentage of the Medicare fee schedule.”

In addition, Winkelstein points out that the main concerns about P4P are not over the concept itself, but center on uncertainties about the metrics Medicare will use to calculate a practice’s performance. Will the system withhold payments to physicians whose patient are at a higher-risk for health problems due to old age, for example? Will it take into account patients who ignore their doctor’s advice about specific tests or preventive practices?

Not controversial, however, are the actual guidelines Medicare recommends physicians follow in order to benefit from P4P funds, all of which are taken from the National Quality Forum. “They’ve had a lot of success because they’re very careful to start with a set of noncontroversial guidelines that are well defined,” he says. “I don’t think you’ll find docs complaining too much about the criteria.”

“This is happening,” adds Winkelstein. “It’s been piloted and everyone knows it’s coming. It’s for that reason that I, for one, feel that we all need to participate in order to make sure it’s a reasonable system.”

—Kevin Fryling