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Buy-Right for Health Care Quality: Evidence and Indicators: Paying for Performance

Slide Presentation by Meredith Rosenthal, Ph.D.

On October 21, 2004, Dr. Rosenthal made a presentation in a Web conference entitled Buy-Right for Health Care Quality: Evidence and Indicators: Paying for Performance.

This is the text version of Dr. Rosenthal's slide presentation. Select to access the PowerPoint® Slides (72 KB).

Paying for Quality

Meredith Rosenthal, Ph.D.
Department of Health Policy and Management
Harvard University
School of Public Health
Boston, MA
October 21, 2004

Slide 1

New Programs to Reward Physicians and Hospitals

  • Quality of care in the U.S. is poor and not improving quickly enough.
  • More than 50 new pay-for-performance programs put in place this decade by health plans, purchasers.
  • Both physicians and hospitals to receive bonuses.

Reference: Health Affairs, Vol 23, Issue 2, 127-141

Slide 2

Targeted Areas of Performance

  • Physicians rewarded based on care in 5-10 domains of evidence-based medicine
    • Structure (e.g., development of Information Technology infrastructure) and process measures typical.
    • Patient experience/satisfaction often included.
  • Hospitals rewarded on broader set of structure, process, and outcome measures (including staffing, complications, readmissions).

Slide 3

Quality Improvement

  • Quality improvement almost never targeted explicitly.
  • Programs reward top performers (e.g., top 20% in market) or all providers reaching a fixed goal (e.g., 75% compliance with a benchmark).
  • Thus rewards pay for past achievements, may widen performance gap.

Slide 4

Strength of Incentives

  • Typical payments for best performers set to roughly 5% of revenues from the sponsoring plan or purchaser.
  • Incentive sponsors usually represent minority share of provider revenues.
  • Will this be enough to spur necessary changes?.

Slide 5

Concluding Thoughts

  • Pay-for-performance targeting broad set of domains has been widely adopted.
  • Current programs may not be well positioned to result in dramatic quality improvements
    • No rewards for improvement.
    • Relatively small dollar amounts.

Current as of March 2005

Internet Citation:

Paying for Quality. Text version of a slide presentation at a Web conference. Agency for Healthcare Research and Quality, Rockville, MD.

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