Changing Physicians Incentives Needs IT

Pay-for-performance is starting to make headway, but if it is going to work, practices will need to move to electronic health records.

LOS ANGELES—A diverse group descended on Los Angeles this week to change the way that doctors get paid. In a turnout that surprised the organizers, even the overflow rooms were packed.

The first national Pay for Performance (P4P) Summit attracted representatives from software vendors, pharmaceutical companies, physician groups, health insurance companies and patient advocacy groups. Their goal is to base doctors pay less for simply seeing patients and more for keeping patients healthy. The path for doing so is unclear.

The conference sponsor, Integrated Healthcare Association, had expected about 300 registrants largely from California; instead, about 750 people from 35 states and several countries signed up. Some were clearly excited. "Weve figured out how to pay physicians to do the right thing," one attendee said into his cell phone over lunch. "Theres still a lot up in the air."

Not surprisingly, doctors are skeptical of these plans, said Carolyn Clancy, head of the Agency for Health Research and Quality, a federal assessment agency. In particular, physicians worry about payers influence on medical decisions and increased record keeping. They fear that quality measures wont be meaningful or that the quality in unassessed areas will decline.

/zimages/4/28571.gifClick here to read more about the debate over pay-for-performance.

The American Medical Association advocates that P4P programs be voluntary and that financial incentives come as bonuses for good performance, rather than cuts for poor performance. However, with more than 100 P4P initiatives under way in the United States, most feel that changes in how doctors are reimbursed for services are inevitable.

Some attendees believe that the idea is finally starting to become practical, particularly because the IHA performance showed that health plans could agree on common performance measures. "Its always been a changing target. Now there are starting to be common criteria with health plans doing the same thing," said Farid Hassanpours, a medical director of the non-profit Inland Empire Health Plan in California.

Alan Miller, a medical director at United Medical Associates in New York, said the conference convinced him that his practice needs to move to electronic health records to push quality initiatives forward. "Its very clear that we cant do this pulling medical records [manually], we need the IT investment," he said.

At the same time, he said wasnt sure where the funds for technology would come from. And with 135 physicians, he admits that his group will have an easier time paying for and implementing new clinical systems than small and solo doctor practices.

"We cannot switch from years of paying for volume to paying for value unless we can give doctors the tools to do so," said Dr. David Brailer, national coordinator for Health Information Technology. P4P could provide a financial incentive to encourage doctors to purchase clinical information systems, and health IT could provide the means to collect them. A national certification program for electronic health records, slated to hit the market this June, could assure physicians that IT investments would not become obsolete.

/zimages/4/28571.gifDoctors will provide higher quality care when given financial incentives to do so, a study concludes. Click here to read more.

"Smoke and mirrors," said one physician, who asked not to be named. "P4P inculcates a good culture," he said, but the idea that it could pay for higher quality and that it could pay for itself by reducing overall health care costs was naive. Even if such measures eventually brought more money into a practice, the up-front costs and risk are too high, he said, and government isnt doing anything to push P4P or health IT into doctors offices.

"Were at risk of overpromising," admitted James Robinson, a professor of health economics at University of California, Berkeley. P4Ps power is limited and depends entirely on picking the right measurements and the right rewards. For too many people, he said, "were in pay for panacea—pay for performance means whatever you want it to mean."

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