QUALIY/PHYSICIANS: P4P in the United Kingdom

The biggest P4P scheme in the world is going on in the UK, one that I first wrote about in early 2004. (For more on the  wider ramifications of reform in the UK ,see yet another article in this weeks NEJM) 

Note that all the GPs there have computers, so they can easily report their process behaviors. Note also that the introduction of the system as done as a way of giving extra cash to GPs, but extra cash for improving quality of primary care process. So the first year’s results are in, and the GPs have done much better than was predicted and better than most American groups studied other than the VA. I think this is so important in the light of where Medcare is going that I’m including the entire discussion section from the NEJM article from the Univ of Manchester group that studied it. It’s called “Pay-for-Performance Programs in Family Practices in the United Kingdom”, and its below the jump, as an exceprt from an article by Arnold Epstein commenting on its implications for the US

*******

In the first year of the pay-for-performance program, English family practitioners performed extremely well with respect to the quality targets, attaining a median of 96.7 percent of the available points for clinical indicators. This greatly exceeded the 75 percent predicted when the scheme was negotiated, and consequently the cost to the taxpayers was considerably more than expected. Before the new contract was implemented, family practitioners typically earned from £70,000 to £75,000 ($122,000 to $131,000). The pay-for-performance program increased the gross income of the average family practitioner by £23,000 ($40,200), although the practitioners bore any additional nursing and administrative costs of meeting the targets. In 2005–2006, family-practitioner income will rise even more, since quality payments have been increased to £125 ($218) per point.

Exact comparisons with U.S. data on quality of care are difficult because of differences in indicators, dates of data collection, and samples. However, some limited comparisons are possible. For example, 91 percent of patients with diabetes had their glycated hemoglobin levels measured in 2004–2005 under the new pay-for-performance program in England. In comparison, glycated hemoglobin levels were measured in 94 percent of patients with diabetes treated by the U.S. Department of Veterans Affairs in 1999–2000 and 93 percent of such patients in 2000–2002,20 in 83 percent of patients with diabetes treated by commercial managed care groups in the United States in 2000–2002, in 82 percent of patients with diabetes treated by Pacific Northwest physician groups with pay-for-performance programs in 2001–2002, in 64 percent of patients with diabetes treated by California physician groups with pay-for-performance programs in 2002–2003, in 89 percent of Medicare patients with diabetes in 2004, and in 76 percent of Medicaid patients with diabetes in 2004. For other aspects of diabetes care, including blood lipid testing, eye examinations, microalbuminuria screening, and influenza vaccination, performance in the first year of the new contract also placed family practitioners in England on a par with their better-performing U.S. peers.

There is no baseline with which to compare performance in the first year of the U.K. program, although the quality of care was already improving before its introduction. The high levels of achievement might suggest that the targets were too easy to achieve. The scheme has been revised for 2006–2007: all minimum and some maximum payment thresholds have been raised, 30 indicators have been dropped or modified, and 18 new indicators have been introduced.24 The high achievement levels might also have resulted from misreporting by practices. To counter misreporting, Primary Care Trusts, statutory bodies responsible for the delivery of health care in local areas, inspect all local practices and undertake detailed audits of randomly selected practices and those suspected of incorrect or fraudulent returns. The results of these audits are not, however, publicly available.

Because achievement was universally high, there was little variation between practices. It was not surprising, therefore, that socioeconomic and demographic factors, which profoundly affect population health and the use of health care facilities, had relatively little influence on achievement. Although practices that served lower-income populations had worse overall population achievement, the effect was small, and they were no more likely to use exception reporting to exclude patients than were practices with more affluent populations. Deprivation-related health inequalities therefore appear unlikely to have been greatly increased by the introduction of the financial incentive program. Smaller practices performed marginally better overall than large ones, although there was much greater variation in the performance of small practices, and many smaller practices are believed to have merged in the face of the administrative pressures from the new contract.

Imputation of rates of exception reporting was possible for only 30 of the clinical indicators (39 percent), and we cannot determine how representative these indicators were. There was a significant positive relationship between rates of exception reporting and reported achievement for these indicators, but the effect was small. It is possible that practices that were better at identifying and treating patients with chronic conditions also tended to identify more patients for whom the targets were inappropriate. Alternatively, practices may have "gamed" the new system. The generally low levels of exception reporting suggest that large-scale gaming was uncommon. However, a small minority of practices exception-reported a much larger proportion of their patients: 91 (1.1 percent) excluded over 15 percent of their patients. These practices warrant closer examination to determine whether their use of exception reporting was appropriate.

The rate of exception reporting varied considerably according to disease group. There were very low levels of exception reporting for hypothyroidism and relatively high levels for mental health problems, coronary heart disease, and chronic obstructive pulmonary disease. This variation may reflect the nature of the indicators for each disease. For example, to meet the main hypothyroidism target, practices were required to record that a patient's thyroid functions had been checked in the previous 15 months. This was a relatively easy target to meet; hence the achievement level was high and there was little reason to exclude these patients. Since the indicator carried only a modest financial reward of 6 points (£456, or $800), there was also little incentive to game. In comparison, the main mental health indicator required a review of medication, physical health, and coordination arrangements with secondary care for patients with severe long-term mental health problems. Not only would one expect legitimate exception reporting to be higher for this indicator, but the incentive to game would also be greater, since the indicator was worth 23 points (£1,748 or $3,050).

Several lessons can be drawn from the U.K. experience. First, the U.K. program was costly and was funded with substantial additional monies rather than by restructuring existing payment systems. In addition to the payments for achieving quality targets, there were further costs, to both the practitioners and the government, of developing and implementing the information-technology systems required to monitor the program. Budget-neutral programs would face greater resistance from family practitioners. Second, a clear baseline is needed to avoid paying for improvements that have already occurred. Third, geographically staggered introduction would enable policymakers to better estimate the quality effects of the program. Fourth, introducing pay-for-performance incrementally reduces risks for providers and payers. Fifth, payers should allow for the possibility of higher-than-expected achievement. Sixth, the risk of inappropriate treatment can be decreased with the use of mechanisms such as exception reporting, but monitoring is required to prevent abuse.

The U.K. experience suggests that greater changes in professional practice can be achieved through pay-for-performance programs than previous research indicates. We do not know whether the size of the financial incentives made the difference in the United Kingdom, and if so, how big incentives need to be. Whatever the case, financial incentives should be aligned to physicians' professional values to avoid serious distortions of care.

All of which leads commente Arnold Epstein to believe that it's going to happen here too soon with CMS leading the way on doctor pay. But there are big differences

In contrast with the British system, we can expect the CMS's approach to extend beyond primary care physicians. In this country, specialists, including surgeons, receive a substantial majority of payments for physician services from the CMS. Because the CMS is unlikely to restrict its efforts to generalist physicians, we must develop a broader array of quality measures for specialists' care to make this policy effective. 

We can also expect the continuing budget deficit to constrain the magnitude of payments. In the United Kingdom, pay for performance was adopted coincident with a substantial increase in funds provided to the National Health Service for payments to physicians. Thus, most physicians benefited from the new system, and no physicians saw their incomes decrease. In the United States, however, budgetary pressure will undoubtedly force the CMS to establish more modest initial financial incentives, probably on the order of 1 to 2 percent of payments to physicians — substantially less than the 5 to 10 percent often provided by health plans to provide sufficient impetus for doctors to change their practices. Of course, the British numbers are larger still — averaging approximately 30 percent before physicians paid any extra nursing or administrative costs. If larger incentives are needed, financial pressures to introduce budget-neutral policies will probably force the CMS to carve out quality bonuses from funds available for annual increases in payments or even from funds for existing payment levels, making some physicians winners and some substantial losers.

Then of course there's the teeny tiny issue of whether with no more money this has a chance of not being torpoeded by the AMA and their ilk. We'll see.

But this is clearly the biggest battle inside health care for the next few years.