Although  pay-for-performance is still a largely undeveloped concept in the healthcare industry, P4P proponents report significant progress in some isolated pockets, and overall the initiative is continuing to move forward.

P4P is a program promoted by the Centers for Medicare and Medicaid Services that rewards physicians for exceeding established benchmarks of care. The rationale behind the concept is to use financial enticements for doctors to provide the highest quality care for the lowest cost, resulting in the healthcare system becoming more efficient and cost effective while achieving better patient outcomes.

Horsham, PA-based NextGen Healthcare is one vendor that has been very active on the P4P front and representatives say there have been some tremendous strides made over the past year.

“At this time last year we were debating what was P4P, what was an outcome measure, what they look like and what they are,” said Lora Baker, NextGen’s health quality measures program manager. “That has really changed – we are no longer debating what is a measure, a lot of ‘one-off’ measure programs are gone and we are now focusing on standards.”

Another major sign of progress is the incorporation of P4P reporting to payers, said Baker, who spoke to Healthcare IT News while she was attending the 4th Annual National Pay For Performance Summit in San Francisco.

“This represents huge progress,” she said. “The agenda at the P4P summit has really progressed from last year. EHR adoption is the key – you can’t just assess performance on claims data.”

Even if the majority of physicians aren’t ready, the P4P program’s structure is continuing to take shape, Baker said. CMS plans to post 2009 results next year based on information reported to the Physicians Quality Reporting Initiative. Once that occurs, she said consumers will have a platform from which to evaluate participating physicians.

Charlie Jarvis, NextGen’s assistant vice president of healthcare industry services and government relations, calls P4P “a natural market evolution that has grown out of the need for the general public to have a better handle on the quality of the healthcare they’re getting.”

The NextGen system uses two sets of P4P measures: one set is cost-reduction metrics embraced by commercial payers; the other set is designed to lower the overall cost of delivering services for chronic diseases and preventative care. Baker describes the system function as “reporting from the clinical side to balance out the claims data.”

ENABLING P4P

Alexandra Drane, co-founder and CEO of Beverly, Mass.-based Eliza, agrees that significant strides have been made in the design of P4P programs and that acceptance by physicians and payers is spreading. Yet much more has to happen, she said, before the initiative can reach its full potential.

“More actionable, relevant and targeted information must be provided to both physicians and patients – in a timely fashion,” she said. “In particular, the patient’s perspective and behaviors must be added to the mix.”
Producing systems for the payer community, Drane says she has seen more organizations working in concert with the provider community to reach out to plan members in order to improve both the quality and efficiency parts of the value equation.

“To us, that’s P4P at its best – all healthcare stakeholders, including providers, health plans and members working together toward the common goal of improved health and increased cost savings,” Drane said. “To that end, there have been vast improvements in both the member outreach technologies as well as the acceptance of these technologies by members, providers and health plans. As a result, more patients are receiving and acting on these communications, thereby staying in better control of their health, and involving their physicians in the management of their health.”

WAY OUT FRONT

While P4P systems are still just illusion to the overwhelming majority of physician practices, it has been a long-entrenched reality for the Medical Clinic of North Texas. Operated by Impel Management Services, the physician network includes 150 physicians spanning 41 offices across the Dallas-Fort Worth metroplex.

The organization’s initial P4P experience goes back a staggering nine years, as the practice conducted its first live electronic medical record in March 2000. Deploying NextGen’s technology, the “true” P4P project officially commenced in 2004.

“At that time we were gambling on what the payers would look for – no one at the time knew,” said CIO Mike Yerrid. “We thought whatever initiatives occurred would be nationally recognized quality standards so we looked at indicators like coronary, diabetes, hypertension screenings and immunizations – conditions that affect the majority of Americans. We used those to create internal protocols and kept tweaking them to get a standard set. That’s what we measured physicians on.”

As it turns out, they gambled smart, Yerrid said.

“Fortunately we anticipated the day P4P would come to fruition, though it took us a little longer than we expected as we continued to work toward that goal,” he said. “We used EMR data to show we are quality physicians and performing to satisfaction. We started out with 60 physicians using the EMR and as we’ve grown it has become part of the culture. We now have 7 million patient encounters in the system and can use that information in our P4P efforts.”

As a result of its P4P billing and PQRI reporting, the North Texas clinic received some $200,000 in incentives, Yerrid said.

“When PQRI came out, we immediately could report those without the physicians even knowing it,” he said. “It was nice to see money coming in from the opposite direction for a change.”