Critical Care Plus

Pay-for-Quality Movement Expanding Nationally

But a supreme cynicism’ still pervades

A new emphasis on quality of care—including basing physician bonuses on that factor—is springing up around the country. In a dramatic change from the traditional managed care cost-cutting mindset, Blue Cross of California has announced it will begin using patient satisfaction measures instead of cost control to calculate physician bonuses.

Under the Blue Cross plan, doctors who score well on patient satisfaction and preventive care surveys can receive up to a 10% bonus on top of their regular quarterly managed care payment, starting in 2003. Before, such bonuses were determined solely by how well physician groups controlled costs.

San Francisco-based Blue Shield of California actually began its quality initiatives in January when it launched a separate quality incentive program. Under this plan, medical groups that meet established quality measures can increase their managed care payments by as much as 5%.

Other organizations affiliated with the California Blue, such as Blue Cross Blue Shield of Georgia in Atlanta, and UniCare Health and Life Insurance Company of Thousand Oaks, Calif., are also considering the move to paying their doctors based on patient surveys.

PacifiCare Health Systems of Santa Ana, Calif., has operated a quality reward system since 1998, based on about three dozen clinical measures. Under it, high-scoring groups are assigned more members, potentially resulting in higher revenues.

Last summer, Boston’s Harvard Pilgrim Health Care signed a four-year contract with Partners HealthCare Systems, giving Partners’ 1000 primary care physicians and 3000 specialists financial bonuses for taking preventive measures such as ensuring diabetes patients get regular eye and kidney checkups.

In Indianapolis, Anthem Inc, is reportedly creating a compensation system that pays physicians and hospitals based on meeting pre-set clinical and preventive health standards.

Jumping on the quality bandwagon, a major Florida managed care coalition now says it is willing to pay higher fees to physicians who achieve the best clinical outcomes. Under the Central Florida Health Care Coalition’s proposal, physicians would be divided into platinum, gold, or silver categories based on their documented outcomes for 10 specified conditions. The Orlando-based coalition represents 145 employers covering more than 1 million people.

Risk-adjusted claims data on office visits would also be used to create a profile of treatment patterns and clinical results for some 5000 physicians in 5 specialties. To earn a top rating, doctors must also meet such additional requirements such as participating in annual mini-residencies to ensure they’re up on the latest treatment techniques.

The decisions on how—and if—to proceed will depend on the results of a pilot program designed to test payment measures and an actuarial analysis. Early indications are that reimbursement rates could vary from 70% of the current Medicare rate for silver group physicians to 120% for platinum doctors willing to treat more patients with chronic illnesses, estimates the coalition’s head, Becky J. Cherney. To push more members to top-ranked physicians, their associated copayment would be reduced. "This is our way of saying we’re willing to pay doctors more for being a good physician," says Cherney.

Some are Skeptical

Not all Florida docs are buying this idea, however. "The HMOs are still trying to nickel and dime doctors" when you compare what could be saved from more effective care that keeps people out of the hospital, maintains Florida family physician Joseph W. Gallagher.

There is a "supreme cynicism" among physicians across the country that no corporate purchaser really cares about medical quality, says William F. Jessee, MD, CEO of the Medical Group Management Association in Englewood, Colo.

A major complaint is that many of these so-called quality compensation proposals don’t really pay directly for better care. Instead, they attempt to drive more patients to top-performing physicians. However, there’s no hard evidence that even this goal is being accomplished. Others complain that the direct bonuses are geared to patient satisfaction surveys rather than hard clinical data. There’s also the question of whether mutually agreeable performance measures can be calibrated. Plus, a significant number of payers must switch to quality performance measures before the provider side of the equation starts to take the issue seriously, say experts.

"Experiments aimed at both holding providers accountable and encouraging them to practice quality medicine are happening across the country," notes benefits consultant Helen Darling. "Figuring out how to do this is going to be tough."