ALEX GANDSAS, MD, MICHAEL SCHWEITZER, MD
Historically, employees in the corporate world have been financially rewarded for outstanding performance and for their contribution to the organization. This reward usually comes in quarterly or yearly bonuses, stocks, or both of these. In the current healthcare system, financial incentives are based solely on productivity measured by volume only, irrespective of the quality of care or outcomes. Doctors and hospitals are equally financially compensated regardless of the quality of care delivered to patients. In the current healthcare reimbursement system, a fee-for-service approach rewards volume productivity without concern for quality, the capitation model incentivizes efficiency while penalizing utilization with again the risk of compromising quality, and a salary system awards constancy without nurturing innovation or productivity. The current models leave the provider with few incentives to strive for or compete for high-quality medicine. A new paradigm of how patient care will be assessed, known as pay-for-performance (P4P), promises to motivate healthcare providers and health organizations by providing higher reimbursements as long as high “quality” evidence-based-medicine is delivered. Moreover, performance measures will be published to give the consumer a selection tool that will ultimately have an impact on provider image, market share, and income. For a program to be deemed successful, the financial rewards to physician groups should be the result of collaborative work between health plans, medical directors, academia, and industry experts. Furthermore, payments should vary depending on the type of incentive program chosen.
Following the report Crossing the Quality Chasm in 2001 , in which more than 98,000 preventable deaths were attributed to medical errors , a growing consensus was reported that the new approach to health care should include fair payments to providers as a reward for good clinical management and outcome.
The concept of pay-for-performance is not new. Programs that compensated clinicians for being compliant with quality assurance programs were attempted in the past but failed due to the lack of physician support. These programs focused mainly on cost and utilization, rather than on clinical outcomes. With the incorporation of information technology as a means to better track patient data, most programs in charge of developing quality measures are likely to request reports of clinical outcomes. In the year 2000, the Integrated Healthcare Association, a California leadership group of health plans, physician groups, health systems, pharmaceutical industry, and consumer representatives, developed the concept of rewarding physician groups for good documented performance. Basically, this plan was based on (a) patient satisfaction (40%), (b) prevention (25%), (c) chronic care management (25%), and (d) use of information technology (10%) .
In general, most pay-for-performance programs establish clinical goals, either as direct implementation of a therapy (eg, give patient aspirin after being diagnosed with myocardial infarction) or as an outcome measurement (eg, morbidity and mortality). Nonclinical goals usually refer to the use of information technology applied to electronic medical records and patient satisfaction. Electronic medical records and computerized follow-up are the main ingredients of the P4P proposition. Practices will need to establish an electronic health infrastructure to provide the payer with performance data.
MEDICARE JOINS THE GAME
Medicare has studied more than 270 hospitals enrolled in its program, looking specifically at the treatment of pneumonia, heart attacks, coronary artery bypass graft operations, and hip arthroplasties. After the first 9 months of implementing the program, an increase was noted in the median score of 6% for all conditions. In this test, hospitals scoring in the top 10% in quality ratings received an extra 2% financial compensation per case, while those scoring in the next 10% received payment increments of 1% per case. On the other hand, a reduction of 2% in payments was made to hospitals that failed to increase their baseline scores .
STILL IN THE WORKS
Proponents of pay-for-performance promise a new way of improving quality and reducing cost by offering financial incentives to those health-care organizations, physicians, or both, who implement evidence-based medicine to improve clinical outcomes and who adopt a robust information technology infrastructure capable of handling electronic medical records. However, because it seems to be a new way of getting reimbursed for high-quality outcome data, risk adjustment parameters should be implemented to prevent physicians from drawing back from the high-risk patient.
In addition, a close collaboration should exist between providers and payers in setting up feasible goals and defining quality measures and bonus payment parameters, including payment timelines. This new relationship may impact new contract negotiations and caution should be exercised in order not to infringe on antitrust laws.
On another note, some practitioners may be concerned because this type of program may tend to lower the threshold, resulting in lower payments for those not participating or not achieving quality goals. Furthermore, a successful practice may capture a greater market share once it is identified as being “quality approved” by the payer. Concomitantly, data should be cautiously analyzed because outliers may skew small-volume practices.
In an ideal world, the participation in P4P programs should be completely voluntary, without punishing low-volume practices. Actually, the American Medical Association is concerned that these P4P models are simply “old-fashioned” withholding programs, in which payments from a withheld pool are returned to the practice once medical groups or hospitals meet specific performance criteria.
The fact that so many private payers and Centers for Medicare & Medicaid Services are experimenting with P4P programs indicates that this new paradigm in health care will continue to expand. Currently, more than 400 hospitals have enrolled in P4P programs, and it is thought that by the end of 2006 more than 100 programs will be available. Pay-for-performance has the potential to modify the current approach of health care by rewarding acute preventive care and promoting better use of medical resources.
CENTERS OF EXCELLENCE FOR BARIATRIC SURGERY
Obesity in America has reached epidemic proportions. It is estimated that more than 97 million Americans are overweight or obese. Furthermore, approximately 7 million are considered morbidly obese with a body mass index of 40 or higher and at least 100 pounds over their ideal body weight.
Studies have shown that a surgical option is the most effective way to achieve and maintain weight loss, significantly reducing major comorbidities, such as hypertension, type II diabetes, sleep apnea, and dyslipidemias .
Over the last 10 years, a significant increment has been noted in weight loss procedures performed in the United States per year, reaching more than 175,000 cases in 2005. Furthermore, last year, the Centers of Medicare and Medicaid Services have defined obesity as a disease instead of a condition. It has been estimated that the cost of treating obesity in the United States was approximately $117 billion, of which $61 billion is related to direct medical costs .
To maintain a level of efficacy, efficiency, and safety, the American Society of Bariatric Surgery (ASBS) and the American College of Surgeons (ACS) have launched the Centers of Excellence Programs, aimed at identifying practices, surgeons, and institutions able to deliver care to bariatric patients in the safest possible way. Both programs have set 125 as the minimum number of cases per year performed by surgeons to obtain full approval status (Table 1).
In many ways, the Bariatric Centers of Excellence Programs share similar principles with a pay-for-performance program.
1. Improve Clinical Outcomes: Bariatric surgery is known to be a challenging field because it has to deal with a high-risk population suffering from multiple comorbid conditions. Insurance companies and malpractice premiums are closely linked to physician performance. Good outcome data with a low morbidity and mortality rate may help contain or decrease premiums and the overall cost per patient.
2. Information Technology: Although not specifically required by Bariatric Centers of Excellence Programs, as seen in traditional pay-for-performance programs, information technology is a “must have” tool for data submission and subsequent analysis to qualify as a participating program.
3. Indirectly assess patient satisfaction by ensuring that the following resources are available:
a. Access to healthcare providers
c. Sensitive in-services
d. Nutritional counseling
e. Support groups
f. Well-equipped facilities (furniture, bathrooms)
4. Financial reward is not rendered monetarily but instead with assumed growth of market share and fast precertification processing.
Several third-party payers have already launched their own Centers of Excellence criteria to identify centers that have a comprehensive bariatric surgery program, including preoperative medical, psychological, and surgical assessment and long-term postoperative follow-ups. The program must also meet volume thresholds and surgeons should demonstrate a commitment to reporting outcome data.
Most of these criteria focus on outcomes, because these parameters are linked to hospital utilization. It is expected that while those practices with higher complication rates will drive costs up by utilizing several hospital resources, practices with good outcomes, mainly low morbidity, mortality, or both, will result in lower hospital readmissions, specifically those that fall outside the global period.
Centers of Excellence programs, like P4P, will lead to an ultimately less expensive approach to weight-loss surgery, financially rewarding surgeons who perform procedures with documented lower complication rates. Hospital administrations will be in a stronger position to capture a larger market share, negotiate a better case rate with insurance companies, and have better leverage to negotiate with malpractice insurance companies. Recently, Blue Cross and Blue Shield of North Carolina increased the average reimbursement rates by 30% to 50% to surgeons and bariatric surgery practices that have been endorsed as Centers of Excellence .
Proponents of the Center of Excellence concept believe that this will help patients decide which surgeon or practice has an excellent track record and comparable outcome data with benchmark standards.
Centers of Excellence programs are in many ways a preamble to pay-for-performance programs, where the patient and payers are empowered to choose a surgeon or practice with an excellent track record and comparable outcome data against benchmark standards.
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Alex Gandsas, MD, is Associate Professor of Surgery at The Johns Hopkins University School of Medicine and Head, Division Bariatric and Minimally Invasive Surgery at the Sinai Hospital of Baltimore. Dr Gandsas sits on the Society of Laparoendoscopic Surgeons Board of Directors and is active in several other societies including the American Society for Bariatric Surgery. He has authored numerous scientific articles and is founder of the popular Laparoscopy.com Internet site for laparoscopic surgery.
Michael Schweitzer, MD, is Assistant Professor of Surgery at the The Johns Hopkins University School of Medicine and Director of Minimally Invasive Bariatric Surgery at the Johns Hopkins Bayview Medical Center. Dr Schweitzer has published his scientific findings in several journals and has presented his work throughout the United States. He is a member of several societies including the American Society for Bariatric Surgery and sits on the editorial board of three journals.
1. Committee on Quality of Health Care in America, Institute of Medicine. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington, DC: National Academy Press; 2001.
2. Achieving high performance in health care: Pay-for-performance. Moving the bar on quality reporting and accountability. Available at: http://www.accenture.com/NR/rdonlyres/ACE1C0B8-6130-4A65-A73B-853751BADD2F/0/pay_performance.pdf. Accessed February 2006.
3. Kahn III CN, Ault T, Isenstein H, et al. Snapshot reporting and pay-for-performance under medicare of hospital quality. Health Affairs. 2006;25(1):148-162.
4. Schauer PR, Ikramuddin S, Gourash W, et al. Outcomes after laparoscopic roux-en-y gastric bypass for morbid obesity. Ann Surg. 2000;232(4):515-529.
5. Kelly J, Tarnoff M, Shikora S, et al. Best practice recommendations for surgical care in weight loss surgery. Obes Res. 2005;13:227-233.
6. The AIS Report on Blue Cross and Blue Shield Plans, November 2004. Available at: http://www.aishealth.com/ManagedCare/BluesNews/BLUObesityRelatedBluesBulge.html. Accessed November 17, 2005.
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