P4P and physician judgment: Is there an ethical conflict?

Opinions differ throughout health care community

Just as in certain consumer-driven businesses, the mantra was always "the customer is always right," in health care, the mantra — at least the one attributed to physician attitudes and principles — historically has been "the patients' needs come first."

But the issue of reimbursement complicates many life situations, and so it does with health care. Unless all patients in the United States had all the means at their disposal to pay for all of their health care needs, payment models would seem destined to create thorny issues associated with the provision of health care services and care.

While fee-for-service has in recent years been the standard model for physician payments, a newer payment model, pay-for-performance, is slowly but surely gaining ground. With pay-for-performance, the stated goal is to improve the quality of patient care in this country.

The implementation of this concept comes when physicians are rewarded with payments for providing quality care based on certain quality measures, which have been determined based on evidence of their effectiveness.

Last December, a position paper authored by physicians with the American College of Physicians (ACP) in Philadelphia, and developed by the ACP's Ethics, Professionalism and Human Rights Committee, raised questions about the potential conflict of interest between pay-for-performance principles and physician decision-making. That paper was titled "Pay-for-Performance Principles That Promote Patient-Centered Care: An Ethics Manifesto."1

"The major issues with pay-for-performance is that there is a conflict of interest between the interests of the payers, physicians and patients," Frederick E. Turton, MD, MBA, FACP, chair-elect, Board of Regents, American College of Physicians, and former chair of the ACP Ethics, Professionalism and Human Rights Committee, tells Medical Ethics Advisor. "Payers want to pay as little as they can for health care; patients want to get as much health care as possible; and the physician is somewhere in between."

Turton continues, saying, "[The physician] wants to take care of his patients well. He's not concerned about how much money the payer makes, or the payer retains; he or she is stuck here in the middle trying to balance this conflict between payer and patient. And what that does is stress his professionalism. If incentives aren't aligned perfectly, what keeps the physician doing the right things is professionalism."

The paper suggests that the pay-for-performance model has "potential unintended consequences for the patient-physician relationship." The organization, in the paper, expressed concern "that the design of pay-for-performance systems will lead to worse care despite measurements that imply good care."

Also, the paper suggests that "pay-for-performance initiatives that provide incentives for good performance on a few specific elements of a single disease or condition, may lead to neglect of other, potentially more important elements of care for that condition or a comorbid condition."

In such a scenario, the papers suggests that elderly patients, who tend to have more than one chronic condition, would be "especially vulnerable."

Physicians also argue that quality measures in certain programs, such as the Centers for Medicare & Medicaid's effort to initiate pay-for-performance measures through its Physicians Quality Reporting Initiative (PQRI), first implemented in 2007, do not keep an individual patient's care in mind.

"Physicians have a professional duty to provide high-quality care to each patient," the manifesto states. "Pay-for-performance and other programs that create strong incentives for high-quality care set up a potential conflict between this duty and the competing interest of trying to comply with a performance measure — whether the measure is a priority for the patient or not."

Potential pitfalls

Specifically, the ACP manifesto states that it is concerned with the following "potential ethical pitfalls and unintended consequences":

deselecting difficult patients, i.e., because patients with more than one chronic condition could cause scores, and therefore a physician's income, to decrease, physicians might be tempted to tell certain patients to go to another doctor.

"playing to the measure" or "gaming the system" rather than focusing on the patient, i.e., the concern that physicians may emphasize getting goods scores on specific performance measures and not on care — which the patient also may need — that is not measured.

misalignment of perceptions between patients and physicians, i.e., the concern that patients may come to believe that their physician is not acting in their interests, but rather the physician's own interests.

increase in unnecessary care and medical cost, i.e., categorizing certain patients, for example diabetic patients, along with the assumption that such patients all require the same level of care, "could encourage unnecessary care."

Other views of P4P programs

Robert Haralson III, MD, MBA, medical director of the American Academy of Orthopaedic Surgeons, in Rosemont, IL, tells MEA that he does not believe that there is an ethical conflict between pay-for-performance principles and the ability of a physician to conduct himself or herself based on ethical principles. Haralson also serves on the American Medical Association's Physicians Consortium for Performance Improvement (PCPI) and is the chair of the Health Professionals Council of the National Quality Forum (NQF).

"I think the quality initiative is the best thing that's happened to medicine in the last 50 years, and I'm a little embarrassed that we have had to be dragged into this kicking and screaming with money as the thing that entices us to do it, because I've been saying all along that we should be evaluating what we're doing to our patients."

Haralson says that "…I think that beginning to look at what we're doing in our practices is really a great thing for humanity and will make the quality of medicine much better. And frankly, [it will] make us as physicians must happier, because I think most of us really want to provide quality medicine."

He suggests that most performance measures under the pay-for-performance model encourage physicians to provide more health care — not less.

While there are several pay-for-performance measures in orthopedics, he says, one in particular illustrates how measuring care can lead to cost savings while still providing quality care. That example is the requirement that orthopedic surgeons select "second-generation cephalosporin, which means that you selected an antibiotic that was not so expensive, but that the literature shows is good enough to be a prophylactic antibiotic."

Also, pay-for-performance measures call for surgeons to stop the antibiotic after 24 hours, because, again, data show that it is one, not necessary, and more expensive for the care of that patient to continue it.

Christine K. Cassel, MD, MACP, president of the American Board of Internal Medicine (ABIM), an independent certifying organization for internists and various subspecialities in Philadelphia, says the ABIM is meant to be "really independent and in the public interest." Therefore, it does not have "explicit policies about medical payment or reimbursement or financing policies."

"That's not our arena," Cassel says. "Our arena, though, is quality of care, so in order for physicians to be board-certified, they have to meet certain standards in how they stay up-to-date with medical knowledge. And they have to submit to us data about how they deal with certain kinds of patients — clinical performance data."

So, where the ABIM interacts with pay-for-performance is that the ABIM, when it receives data from physicians for certification purposes, the organization in turn transmits that data to insurance companies or purchaser programs like Bridges to Excellence, which have pay-for-performance requirements.

The ABIM does this, Cassel says, "really just in the spirit of reducing the redundancy of all this measurement burden."

"So, I don't have an opinion about it one way or the other, but as a person who studies the evidence, I can say . . . there's no evidence to date that it has improved quality of care," Cassel tells MEA.

"And I think a lot of people are thinking that in and by itself, [pay-for-performance] is inadequate to get us to where we need to be as a nation in terms of improving quality of care, but it's a tool among many that are being used," she adds.

In fact, a study published in Health Affairs earlier this year,2 of pay-for-performance on the state of Massachusetts health system, stated in its abstract that "Overall, P4P contracts were not associated with greater improvement in quality compared to a rising secular trend."

"Future research is required to determine whether changes to the magnitude, structure, or alignment of P4P incentives can lead to improved quality," the study states.

According to the ACP's Turton, "incentives are everything" and "the key" is to have incentives that are aligned between physician, the patient, and the payer. Toward that end, the group's ethics manifesto suggests that the "best way to avoid pitfalls is to acknowledge their potential to induce unwanted behavior and develop systems that ensure accountability for professional behavior…"

The three steps it suggests are the following:

ensure transparency, i.e., make sure patient are aware not only about those incentives underw which the physician may be operating, but also how their physician performs on all quality measures;

measure what is important to patients;

monitor unwanted behavior and intervene.

Crisis of public confidence possible

The conclusion of the ACP's position paper suggests that "pay-for-performance and other strong incentives can increase the quality of care if they purposely promote the ethical obligation of the physician to deliver the best-quality care to her or his patient."

However, the paper also suggests that current evidence doesn't place "sufficient emphasis on protecting the interests of patients," and therefore the payment models could unleash a "crisis of public confidence" in the provision of health care.1

Cassel also highlighted the skills that an individual physician brings to each patient.

"One of the things that doctors do that is very underappreciated is they make a diagnosis," she says. "The patient doesn't come in with diabetes on their forehead. They come in saying, 'I'm tired and run down — you know, I'm losing weight. And then the doctor has to figure out what's wrong with them.

"There's no quality measure that evaluates that," Cassel says.


  1. Snyder, Lois, and Neubauer, Richard L. Pay-for-performance principles that promote patient-centered care: An ethics manifesto. Ann Intern Med 2007; 147:792-794.
  2. Pearson, et al. The impact of pay-for-performance on health care quality in Massachusetts, 2001-2003. Health Affairs 2008; 27:1,167-1,176.


For more information, contact:

  • Christine K. Cassel, MD, MACP, President, American Board of Internal Medicine, Philadelphia.
  • Robert Haralson III, MD, MBA, Medical Director, American Academy of Orthopaedic Surgeons, Rosemont, IL. Web site: www.aaos.org.
  • Frederick E. Turton, MD, MBA, FACP, Chair-elect, Board of Regents, American College of Physicians, Philadelphia. E-mail: fturton@gate.net.