JCAHO issues roadmap on P4Ps, citing few well-articulated goals’

Agency calls currently operating programs relatively untested

Noting that while pay-for-performance (P4P) programs have grown in popularity in recent years, "few are guided by well-articulated goals and principles," the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has issued its own "Principles for the Construct of Pay-for-Performance Programs."

Among the key tenets of the document are the following:

  • The goal of P4P programs should be to align reimbursement with the practice of high-quality, safe health care for all consumers.
  • Programs should include a mix of financial and nonfinancial incentives (such as differential intensity of oversight, reduction of administrative and regulatory burdens, and public acknowledgment of performance) that are designed to achieve program goals.
  • When selecting the areas of clinical focus, programs should strongly consider consistency with national and regional efforts to leverage change and reduce conflicting or competing measurement.
  • Programs should be designed to ensure that metrics upon which incentive payments are based are credible, valid, and reliable.
  • Programs must be designed to acknowledge the united approach necessary to effect significant change, and the reality that the provision of safe, high-quality care is a shared responsibility between provider organizations and health care professionals.
  • The measurement-and-reward framework should be designed strategically to permit and facilitate broad-scale behavior change and achievement of performance goals within targeted time periods.
  • Programs should reward accreditation or have an equivalent mechanism that recognizes health care organizations’ continuous attention to all clinical and support systems and processes that relate to patient safety and health care quality.
  • Incentive programs should support an interconnected health care system and the implementation of interoperable standards for collecting, transmitting, and reporting information.
  • Programs should incorporate periodic, objective assessment into their structure.
  • The evaluations should include the system of payment and incentives built into the program design to evaluate its effects on achieving improvements in quality, including any unintended consequences.
  • Provisions should be made to invest in sub-threshold performers who are committed to improvement and are willing to work themselves or with assistance to develop and carry out improvement plans.

"We saw the proliferation of these programs and felt in reviewing them that they were all well minded, but that there were a lot of [underemphasized] considerations we felt were important. And that our voice could be heard on the quality side, saying, Here are some very seminal considerations in the framing of these programs that could help guide their development,’" explains Margaret VanAmringe, MHS, JCAHO’s vice president for public policy and government relations in Washington, DC.

JCAHO examined about 100 programs, she continues. "People have in their minds implicit criteria about what they want to do and how, but we felt something this important would benefit from explicit principles," she notes.

"These are the kind of things sponsors should sit around and think about and discuss, before they put everything together," VanAmringe asserts.

Unintended consequences?

Why the need for such formal principles? For one thing, argues JCAHO, well-designed programs can help avoid unintended consequences.

"For example, if a hospital program picks out some manageable number of measures and will pay differentially on whether or not they meet a threshold, there can be particular attention paid to those measures to the detriment of other [care issues] in the hospital," she explains.

"You don’t want to focus so much on those without other day-to-day processes being done well and being rewarded for that," VanAmringe points out.

In other words, if you are the sponsor of a program, you want to make sure the measures you use are not contradictory of good practice in other areas, she says.

"That’s why we feel there should be national measures," VanAmringe notes. "We’re contributing to that now under the ORYX core measures; if you use these, you standardize and will mitigate against conflict."

Problems with payment systems

Another key issue noted in the principles is that payment systems frequently do not recognize nuances of care delivery.

"Right now, most payment systems — especially in the government — are focused on units: how many of these services you provide, how many procedures you do," she says.

"They do not necessarily ask what it takes to really produce high quality of care. For example, certain patients need more education or follow-up, or more time spent on safety, but you don’t pay the hospital for that," VanAmringe adds.

"One of the best things about pay for performance, if done well, is that it can help realign the payment system. But to align it with high quality of care may mean we pay differently." she explains.

Which leads to JCAHO’s assertion that P4P programs should include nonfinancial incentives as well as financial incentives.

"We think a lot of nonfinancial incentives are important drivers of behavior, though they might not seem to be as strong as money," she points out.

"In the quality arena, we see a lot of hospitals spending lots of time seeing that they have a culture of quality, but they don’t get any reward for that.

"They will still have the same number of oversights, the same visits from the government, and maybe from accreditors; where’s the reward for fixing a safety problem?" VanAmringe asks.

JCAHO is beginning to offer just such non-financial incentives under its new survey process, "But we are only one accreditor, and it costs a lot of money," she notes. "People should not underestimate what a strong driver professionalism is."

The reward structure, VanAmringe continues, also should take into account the unique characteristics of a provider organization’s mission.

"There are examples where a hospital may have a very unique status; it may be a safety-net hospital, or a sole community provider," she says

"This can make it a little harder to achieve the performance objectives a program may have," VanAmringe adds.

"So if you only look at the threshold and only pay hospitals that meet 90%, there may be a hospital with a unique mission that has a harder time doing that; do you say that hospital should not be rewarded?" she asks.

What will the impact be?

Beyond the obvious impact of an accrediting body such as JCAHO taking a stand on the P4P issue, and the possibility that these principles may be codified in future survey processes, there is some debate about their practical impact.

While some quality sources criticize the new principles as an effort on JCAHO’s part "not to be left behind" in the movement toward P4P programs, they nevertheless recognize the positive impact they could have.

"The thing that’s very positive is they are trying to say that if there is to be a reimbursement environment, they should focus on standards of care and performance expectations — more on comparative data –— and that they are also going to partner that with evidence-based information," says Judy Homa-Lowry, RN, MS, CPHQ, president of Homa-Lowry Healthcare Consulting in Metamora, MI.

"In other words, they’re looking not just at risk-adjusting data, but what is the standard of care. We’ll be able to look at trends and patterns of care as well as outcomes; so as this would grow, you could base incentives on outcomes that have supported good practices," she continues.

"To me, this looks like a way to standardize not only requirements, but some of the clinical approaches that have been found to do well. If we do that, the incentives will be appropriately placed," Homa-Lowry says.

"It surprises me that they even got involved, unless they felt left out of this," adds Patrice L. Spath, of Brown/Spath Associates in Forest Grove, OR.

"There’s been a lot of discussion on how to measure and compare, and a lot of these principles have really come out of the whole report card initiative," she says.

And Spath points out that while the principles articulated by JCAHO "are not that different from those that governed quality activities about 10 years ago," when the profession began to measure comparative performance, "the difference now is, those people who are better performers — it appears — will benefit from that."

A plus for quality

That may be a big difference indeed, not only in who gets rewarded, but in the overall standing of quality efforts within the hospital culture, some observers argue.

"If you look at the health care system, we are kind of Neanderthals in terms of improving quality," VanAmringe argues.

"For example, there’s a lot of clinical information available on how to do things right, but it takes lot of time to percolate [through the system]. There’s quite a lag from a controlled clinical trial to something being put into practice. Pay-for-performance [programs] can say, Here’s the latest information.’ People will stand up and take notice right away, so in some ways, it can decrease the lag time for all practitioners and providers, and keep the spotlight on quality," she explains.

A twofold issue

"It’s really a twofold issue," Homa-Lowry adds. "The Joint Commission is working hard to make patient safety their No. 1 issue, with the adoption of national patient safety goals and actual accredit participation requirements.

"I think the other piece of it is that in the past, a lot of organizations have not really looked at the cost benefits from change processes — not only good patient care, but operating more efficiently and effectively. This will be a way, if we have consistent practices and processes, to more easily study for variation," she continues.

That emphasis on P4P is a definite plus for quality managers, VanAmringe adds.

"I think to the extent that hospitals are, from the leadership on down, trying to imbue a culture of quality and safety within the organization, quality managers are already well positioned," she observes.

"But this absolutely makes them more important to administration; it will underscore their importance. Ultimately, you need to figure out a way to reward hospitals for having a culture and infrastructure within its walls that constantly seeks to improve the quality it provides, which makes the quality manager very important, in my view," VanAmringe notes.

"It will link the quality manager to the financial success of the company and will either make them more involved in the operations, and/or the operations folks will get more involved in clinical delivery," Homa-Lowry says. "It will tend to draw them closer together."

"These principles, if slightly reworded, should be considered in how you use internal data in your organization," Spath notes.

"If I am a quality manager and use quality data to look at whether Dr. Smith or Dr. Jones overutilizes, we need to make sure we are not encouraging Dr. Jones to only take the patients who are the least sick so he does not look bad," she points out.

"You need to make sure your program goals are transparent or measurable, and you could use this as a model for developing your own principles for use of comparative data," Spath adds.

Need More Information?

For more information, contact:

• Judy Homa-Lowry, RN, MS, CPHQ, President, Homa-Lowry Healthcare Consulting, 560 W. Sutton Road, Metamora, MI 48455. Phone: (810) 245-1535. E-mail: homalowry@earthlink.net.

• Patrice L. Spath, Brown-Spath & Associates, P.O. Box 721, Forest Grove, OR 97116. Phone: (503) 357-9185. E-mail: Patrice@brownspath.com.

• Margaret VanAmringe, MHS, Vice President, Public Policy and Government Relations, Joint Commission on Accreditation of Healthcare Organizations, 601 13th St. N.W., Suite 1150 N., Washington, DC 20005. Phone: (202) 783-6655, ext. 14. E-mail: Mvanamringe@jcaho.org.