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Aligning Incentives for Better Outcomes:
State of Play
Ashish K. Jha, MD, MPH
28 June 2016
@ashishkjha
+ Why do we need pay for
performance?
+
Variations in AMI Mortality
0
100
200
300
400
500
600
700
800
900
1000
5% 10% 15% 20% 25% 30% 35% 40% 45%
NumberofHospitals
Risk-adjusted 30-day Mortality Rates
+
Why is Pay for Performance attractive?
Has tremendous face validity
Works in other industries
Aligns incentives for better care:
 Allows providers to do well when doing good
+
Incentives 1.0: What did we try?
Premier P4P
 Began 2003
 Small dollars
 Process measures
+
Did it work?
+
13.3%
11.2%
13.2%
10.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Q12002
Q22002
Q32002
Q42002
Q12003
Q22003
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
Q12006
Q22006
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Premier Non-Premier
Onset of Pay-for-performance
Premier HQID: Did It Work?
Jha et al. NEJM 2012
+
And the news is discouraging too…
 Headlines over the past 5 years:
 “Health Affairs article finds Medicare’s pay-for-
performance did not spur quality improvement”
 “New NEJM Report: Pay-for-performance…a bust”
 “Paying doctors for quality doesn’t work”
 “Medicare’s policy did not reduce infection rates”
+
What is the ACA doing for P4P?
A variety of new programs
Value-based purchasing
Hospital Readmissions Reduction Program
Hospital-Acquired Condition Reduction
Now: MACRA and MIPS
+ Will this work any better?
+ We have some evidence in
+
ACA Reform #1: HRRP
Up to 3% penalty for high readmission rate
For a select group of conditions
+
HRRP: Impact on readmission rates
21.5%
17.8%
15.3%
13.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015
Targeted conditions
Non-targeted conditions
Source: Zuckerman et al., NEJM 2016
ACA
+
Which hospitals are getting penalized?
6.3% 5.7%
15.1%
20.9%
23.4%
17.8%
16.0%
7.2%
21.0%
30.4%
37.1%
27.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Percentage Black Percentage
Hispanic
Divorced/never
married
Less than High
School Diploma
Lowest Quartile
of Household
Income
Medicaid
Enrollment
Low readmission rate hospital High readmission rate hospital
Barnett et al., JAMA IM 2015
+
ACA Reform #2: VBP (aka P4P)
Up to 2% of Medicare payments tied to:
Broad set of quality measures:
 Processes
 Outcomes
 Patient Experience
 Efficiency
+
Impact of VBP on Mortality Rate
12.8%
11.2%
11.1%
15.8%
14.3% 14.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Q1
2008
Q2 Q3 Q4 Q1
2009
Q2 Q3 Q4 Q1
2010
Q2 Q3 Q4 Q1
2011
Q2 Q3
start
Q4 Q1
2012
Q2 Q3 Q4 Q1
2013
Q2 Q3 Q4
VBP Hospitals Non-VBP Hospitals
Onset of VBP
Figueroa et al., BMJ 2016
+
Impact of VBP on Patient Experience
64
69
71
50
55
60
65
70
75
80
85
90
95
100
2008 2009 2010 2011 2012 2013 2014
PercentofPatientsRatingtheirHospital'9&10'
Pre-VBP Slope=
+1.46% per year
Post-VBP Slope=
+0.55% per year
Onset of VBP
+
What have we learned?
Incentives can move the needle
 Simple measures
 Narrowly focused
They can have unintended consequences
 We need to understand the tradeoffs
Do they make care meaningfully better?
 Jury remains out
+
Let’s reframe
 Old question: “Does pay-for-performance work?”
 New question: “How do we get pay-for-performance to
work?”
+
Incentives 2.0: What might it look like?
Bigger incentives?
Target a small number of outcomes?
 Especially over the longer run
 Across a broader set of measures
Structure it more simply
Play into intrinsic motivations
More nuanced approach to the safety net
+
Thank you
Email: ajha@hsph.harvard.edu
Twitter: @ashishkjha

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Dr. Ashish Jha: "Does ‘Pay for Performance’ Work?" 6.28.16

  • 1. + Aligning Incentives for Better Outcomes: State of Play Ashish K. Jha, MD, MPH 28 June 2016 @ashishkjha
  • 2. + Why do we need pay for performance?
  • 3. + Variations in AMI Mortality 0 100 200 300 400 500 600 700 800 900 1000 5% 10% 15% 20% 25% 30% 35% 40% 45% NumberofHospitals Risk-adjusted 30-day Mortality Rates
  • 4. + Why is Pay for Performance attractive? Has tremendous face validity Works in other industries Aligns incentives for better care:  Allows providers to do well when doing good
  • 5. + Incentives 1.0: What did we try? Premier P4P  Began 2003  Small dollars  Process measures
  • 8. + And the news is discouraging too…  Headlines over the past 5 years:  “Health Affairs article finds Medicare’s pay-for- performance did not spur quality improvement”  “New NEJM Report: Pay-for-performance…a bust”  “Paying doctors for quality doesn’t work”  “Medicare’s policy did not reduce infection rates”
  • 9. + What is the ACA doing for P4P? A variety of new programs Value-based purchasing Hospital Readmissions Reduction Program Hospital-Acquired Condition Reduction Now: MACRA and MIPS
  • 10. + Will this work any better?
  • 11. + We have some evidence in
  • 12. + ACA Reform #1: HRRP Up to 3% penalty for high readmission rate For a select group of conditions
  • 13. + HRRP: Impact on readmission rates 21.5% 17.8% 15.3% 13.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 Targeted conditions Non-targeted conditions Source: Zuckerman et al., NEJM 2016 ACA
  • 14. + Which hospitals are getting penalized? 6.3% 5.7% 15.1% 20.9% 23.4% 17.8% 16.0% 7.2% 21.0% 30.4% 37.1% 27.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% Percentage Black Percentage Hispanic Divorced/never married Less than High School Diploma Lowest Quartile of Household Income Medicaid Enrollment Low readmission rate hospital High readmission rate hospital Barnett et al., JAMA IM 2015
  • 15. + ACA Reform #2: VBP (aka P4P) Up to 2% of Medicare payments tied to: Broad set of quality measures:  Processes  Outcomes  Patient Experience  Efficiency
  • 16. + Impact of VBP on Mortality Rate 12.8% 11.2% 11.1% 15.8% 14.3% 14.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Q1 2008 Q2 Q3 Q4 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 start Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 VBP Hospitals Non-VBP Hospitals Onset of VBP Figueroa et al., BMJ 2016
  • 17. + Impact of VBP on Patient Experience 64 69 71 50 55 60 65 70 75 80 85 90 95 100 2008 2009 2010 2011 2012 2013 2014 PercentofPatientsRatingtheirHospital'9&10' Pre-VBP Slope= +1.46% per year Post-VBP Slope= +0.55% per year Onset of VBP
  • 18. + What have we learned? Incentives can move the needle  Simple measures  Narrowly focused They can have unintended consequences  We need to understand the tradeoffs Do they make care meaningfully better?  Jury remains out
  • 19. + Let’s reframe  Old question: “Does pay-for-performance work?”  New question: “How do we get pay-for-performance to work?”
  • 20. + Incentives 2.0: What might it look like? Bigger incentives? Target a small number of outcomes?  Especially over the longer run  Across a broader set of measures Structure it more simply Play into intrinsic motivations More nuanced approach to the safety net

Notas do Editor

  1. This is an example of the variations in outcomes for acute myocardial infarction for Medicare patients entering a hospital in 2010. There are hospitals where outcomes are four times worse than those in other hospitals. Similarly, for cancer care – we see large variations in cancer-related death rates across medical centers, across states, and across regions. While the data are less well defined, there is plenty of reason to believe that there are clinically meaningful variations in use of evidence-based chemotherapy regimens, approaches to cancer surgeries, and other types of effective cancer care across different local healthcare markets.
  2. Given these variations – there is a broad consensus that care is clearly suboptimal. In some instances, there may be “overuse” of un-necessary treatments – but for many critical conditions, the problem of “under use” is far more prevalent and problematic. Patients often fail to get evidence-based treatments. This is why policymakers and private payers turned to P4P: it has tremendous face validity. The notion is simple: align the incentives for better care. In the old “fee-for-service” world (which is still dominant in cancer care), you got paid more to do more. Providers generally didn’t get paid more to do “better” (that is, to be more evidence based). It works in most industries: higher quality providers of services get to charge more, deliver better services While P4P has been around for a very long time, it has gotten substantial traction in healthcare over the past 10 years
  3. So have the efforts with P4P gone? These headlines tell the tale. Even as of August, 2014, in the NEJM – the latest disappointing story on P4P from England on hospital care – it didn’t work.
  4. If you synthesize the broader field of P4P and its impact: the evidence is underwhelming. It doesn’t appear to work.
  5. See sheet 1 in attached Excel file. Numbers are fudged a bit from Arnie’s paper, but starting and final rates are exact. Targeted conditions include: AMI, CHF, PNA (excluded hip/knee and COPD)
  6. Data for odds ratios are found in Sheet 8 of the “Data for UCSF talk” excel file.
  7. Sheet 2 in accompanying data file.
  8. From Irini’s unpublished HCAHPS trends paper. Sheet 1 in accompanying data file.
  9. The conversation on P4P has changed. It is no longer – does P4P work in healthcare? Because the alternatives are not palatable: Alternative #1 – status quo – not sustainable Alternative #2 – purely shift risk-taking to providers (i.e. bundled payments, capitation) without substantial quality targets. While this is more viable (and where we are heading) in the short run, lack of P4P and lack of robust quality targets will create substantial political and clinical problems with such models. Therefore, the real question we need to ask ourselves is: what do we need to do to get P4P to work?