Hospitals Start to Adapt to a P4P World
Last summer a survey of major employers by the Deloitte Center for Health Solutions found that 10 percent of respondents were engaged in some form of quality-based purchasing of health plans and provider networks (known as P4P for Pay for Performance or VBP for Value-based Purchasing). The majority of respondents were skeptical either that they would get the necessary return on investment or that proper information systems were in place to support P4P. However the surveyed employers often saw at least a “limited” potential in cost savings and improved quality. They were interested in better outcome measurement, quality benchmarks, and more transparency from healthcare providers. Meanwhile the The Managed Care Information Center reported it found 112 P4P programs in 2005 vs. 84 in the previous year.
Healthcare Informatics is now listing a number of initiatives across the country that also point to the emergence of pay for performance as a trend healthcare organizations will have to take into account, starting with hospitals. Some scored high in the P4P Hospital Quality Incentive Demonstration (HQID) run by CMS and Premier (an organization owned by not-for-profit hospitals) last year. (CMS announced last month another trial aimed at physicians.) The HQID project assumption is that financial incentives can influence processes and culture in a way that will lead to better outcomes.
On the other side of the scale some states such as New Jersey have been found to rank consistently low in nationwide clinical quality rankings. The converging pressure to control costs and calls for accountability on quality both point to a mounting demand from payers for P4P programs. This should translate into requests to have more data at hand, as well as better data quality. This in turn would require hospital CIOs to ramp up the implementation of clinical software. However, industry observers warn about the risk of simply optimizing results against specific metrics rather than overall care quality. Measures need to be broad and accurate enough to reflect true performance.
November 15, 2006 Related topics: Finance, Trends, IT & software