Addressing Issues

Aligning Payment Policies with Care: Examples and Case Study Concerning Payment Structure

The National Business Group on Health Bridges to Excellence Plan

In this example, employers and health plans partner to provide incentives to physicians to deliver care that is associated with good outcomes in their patients.  A description of the these Pay for Performance activities are included in a briefing paper that provides:

• Discussion of two initiatives
• Results and measures
• Success factors
• Steps for employers when considering initiatives.

Click here for the Issue Brief July/August 2004 “Pay for Performance: Emerging Solution for Value-Based Purchasing” provided with permission from the National Business Group on Health www.businessgrouphealth.org.

How an Incentive System Can Work: California's Pay for Performance Plan.
In January 2002, California's six largest health plans agreed to support a single physician performance scorecard and a new Pay for Performance initiative expected to deliver $100 million in incentives each year to doctors who contract with HMO plans. The goal is to create more motivation for physicians to perform a variety of quality and preventive care actions for which they have not been previously rewarded.

The six health plans - Aetna, Blue Cross of California, Blue Shield of California. CIGNA, Health Net, and PacifiCare - serve more than 8 million Californians. The plans have set aside 5 - 10 percent their funds to reward doctors in the program. All six expect to have a Pay for Performance process in place by January 2003.

Executives from the health plans, which all belong to the non-profit Integrated Healthcare Association, estimated that the incentives should reach 35,000 physicians, or 70 percent of the doctors actively practicing in the state. The incentives will apply only to capitated enrollees in HMO plans - not enrollees in PPO programs, the state Medicaid program or individual Medicare Plus choice plans. The incentives would be applied in addition to the capitated payments the insurers already award to doctors. Each health plan can design its own incentive program based on the common scorecard and also request contracting doctors to provide more data for an individual health plan scorecard. The groups that rank in the bottom 25 percent of the universal scorecard probably would not receive any incentive payments.

The Pay for Performance system will be based on a balance of prevention, chronic care management, and patient satisfaction measures.

• Fifty percent of the score will be derived from clinical measures such as effective screenings for breast and cervical cancers, management of chronic care conditions (asthma, diabetes and heart disease) and administration of childhood immunizations. Programs in smoking cessation and antibiotic markers have yet to be defined, but will be added to the score.
• Forty percent of the score will come from patient satisfaction measures.
• Ten percent will be determined by information technology implementation.

An independent entity will validate the data presented by health plans and publish the results, most likely on a public Web site.

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Online Report Card.
www.opa.ca.gov/report_card
As part of the effort in California to help consumers make informed health care decisions, an online report card has been compiled. The report card currently compares a list of HMOS, rating them as poor, fair, good, or excellent in five different areas of quality and service - "Staying Healthy," "Getting Better", "Living With Illness," "Doctor Communication and Services," and "Plan Service." The report card will soon include information on 81 medical groups, which provide health care services to more than 10 million Californians enrolled in point of service plans or commercial and Medicare HMOs. Information for the report card will come from the 2002 Consumer Assessment Survey, which measures consumers' access to primary and specialty care, patient/physician communication, overall care and preventive care counseling.

The information will be available online and in printed form, and will be offered in Spanish and Chinese, as well as English.

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