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The hope, for example, is that providers will look at pay for performance as an incentive to improve their information technology. Maybe in that same P4P process they will adopt evidence-based medicine as a way to improve their clinical processes. In the form of the Centers for Medicare & Medicaid Services, the federal government is showing growing interest in things like P4P. Why? Because pressure is growing on Washington to demand more value for its healthcare expenditures. The government eventually will have to devise a way to help the approximately 45 million Americans who roll the dice every day without health coverage.
Ultimately, the biggest efficiency gains may come as pressures on the industry force its formerly isolated stakeholders into new alliances—or at minimum, into discussions about mutual self-interest. Although the future can always bring unexpected events that make crossing paths diverge, the next five years could see many propitious intersections.
“Combined, we are going to get to an intersection that could be good,” says Janet Marchibroda, CEO of the eHealth Initiative and Foundation, a Washington, D.C.-based organization that strives to improve healthcare quality, safety and efficiency through information technology. “We have demands from consumers, including all of us who are getting older, more educated and used to the Web. We are used to banging folks over the head when we don’t get what we want. Combine that with IT becoming more interoperable, and add transparency and accountability and rising costs, and they could push us over the edge to our country’s vision—a navigable healthcare system.”
P4P will explode, one way or another
In the past five years, pay for performance has moved out of theory and into practice. But even the approximately 110 pay-for-performance programs in place nationwide usually carry the tag “demonstration” or “initiative.” In the next five years, the question will be whether pay for performance will achieve the critical mass necessary for it to be evaluated as a reliable change agent.
CMS’ affection for P4P shows no signs of waning. Even with a relatively small $8.85 million pot of money in its Premier Hospital Quality Incentive Demonstration, CMS announced in November 2005 that the project had demonstrated 4 percent improvement in patients with acute myocardial infarction, 9 percent improvement in patients with heart failure, 10 percent improvement in pneumonia, 5 percent improvement in coronary artery bypass grafts and 5 percent improvement in total hip and knee replacements. CMS administrator Mark B. McClellan, M.D., Ph.D., gushed that such results were “exactly what we should be paying for in Medicare.” Hospitals in the top 10 percent for a given condition were awarded a 2 percent bonus in Medicare payments.
The Deficit Reduction Act of 2005 requires CMS to develop a value-based plan in the 2009 fiscal year, which will include processes for choosing quality measures, processes for validation of those measures, and a system of payment adjustments. “So it is not a question on whether the marketplace will really take it on or not,” says Suzanne Delbanco, CEO of The Leapfrog Group, “because now the biggest purchaser of healthcare will.”
The public reporting of quality information and pay for performance are inexorably tied. Paul Keckley, executive director of the Vanderbilt Center for Evidence-based Medicine in Nashville, Tenn., says that while the two had been on parallel paths, those paths may soon converge.
“More and more of the clinical processes—for example, how diagnoses are done and what interventions are prescribed—will be under the spotlight,” Keckley says. “There will be much more payor attention on adherence to the evidence, on things like inappropriate variation, or the overuse or underuse of diagnoses and interventions. That will be linked directly to the various ways we can pay or withhold payment from providers.”
The bigger question that will need an answer in the next two or three years is what types of payments or incentives actually change behavior, Keckley says. “The early P4P projects have threshold bonuses and some tiered bonuses, but what do you do about an organization that hits a threshold and can’t move any higher? Do you suspend any payments?”
Mechanical challenges in P4P are numerous. Much debate has led to little consensus on the incentives necessary to get a physician’s attention. And P4P initiatives often rely on new money to fund them—a self-limiting flaw that could doom many efforts to a short lifespan when the new money runs out. Others worry that P4P is not a comprehensive solution that survives in any context, and that a more systematic look at aligning incentives is necessary—including the removal of so-called “perverse incentives,” where doctors get paid more to do more tests and procedures.
“Back in Washington, you hear senators talking about it as if we just sprinkle a few performance measures on top of fee-for-service medicine and think that is going to do any good,” says Alain Enthoven, emeritus professor of management at Stanford University. “You are talking about doctors who don’t have basic underlying incentives to manage resources wisely. For P4P, it all depends on which kind of doctors you are talking about. Are they in medical groups that accept responsibility for managing the cost of a population?”
At this point, P4P is like a drug that has wowed creators with its results from initial clinical trials. So one concern becomes not about effectiveness in the baseline results, but whether the whole idea is getting a true test.
“One danger we face is that a few years from now—once the 100 experiments we have going across the country for pay for performance have had the test of time—we may find that our efforts have been far too wimpy,” Delbanco says. “We are going to be standing there having conversations maybe about how pay for performance doesn’t work, but in fact what we will be discussing is that our mild attempts at pay for performance didn’t work. That will lead to a whole new round of discussion on payment reform and how to align incentives.”
All about the quality
Elizabeth McGlynn, Ph.D., associate director of Santa Monica, Calif.-based RAND Health, published a 2003 study, “The Quality of Care Delivered to Adults in the United States,” that found only 55 percent of American patients receive recommended care—and the level of quality varied substantially for certain medical conditions. The poor overall healthcare quality error rate often compares unfavorably with superior mistake ratios, such as the percentage of IRS phone-in tax advice that is accurate and the percentage of luggage lost by airlines.
In practice, “recommended care,” or evidence-based medicine, has made inroads into the care of discreet populations with single conditions. But while there is ever more reliable data on treatment of diabetics, for example, the formula becomes more complicated by comorbid conditions like heart disease and depression, or even by factors like age, says Keckley.
“What EBM has done in its first wave of activity is probably grabbed a lot of the low-hanging fruit,” Keckley says, adding that better informatics tools are allowing for more distinct profiles of single-disease populations. “Now we have to create the evidence around which approaches work best. So there is some catch-up.”
Big players dominate quality improvement programs. Large multispecialty groups tend to pursue evidence, adopt guidelines and manage variation aggressively, but those groups only represent some 9 percent of physicians nationwide, Keckley says. Two high-cost variables—computers and people—hold back widespread adoption of quality improvement in most medical offices, says Francois de Brantes, national coordinator of Bridges to Excellence, a Washington, D.C.-based quality improvement organization.
“Larger practices can hire a specialized nurse who can go from practice site to practice site,” de Brantes says. “That type of effort is very difficult to get done in a traditional small practice. There are no SWAT teams out there to help the docs change, apart from the quality improvement organizations, and they don’t have the staff to change 150,000 small practices across the country.”
The tools of the trade for quality improvement are electronic medical records, yet a recent survey by The Commonwealth Fund, a New York-based private foundation, found that only 23 percent of primary-care physicians use EMRs. But the next few years could see propulsion of EMR use and the data that goes along with them as more regional health information organizations form. With more RHIOs come more, and better, data to build the case for evidence-based medicine.
“With RHIOs and other common repositories of data, we have standardizable data tools that we can mine,” Keckley says. “At that point, we can associate various interventions with various characteristics of the population retrospectively, instead of having to go out and spend nine or 10 years testing and publishing.”
What pushes quality is often the public reporting of outcomes, yet adoption of public reporting is in pockets. Payors are certain to keep the pressure up, but that chorus may soon be joined by more employers—and even consumers. “There are far more levers at work in the marketplace that are pushing physicians to adhere to guidelines,” Delbanco says.
‘Mess-information’ era will wither
Google takes about 0.12 seconds to return 184 million pages on diabetes. The search engine takes one hundredth of a second longer to offer 163 million results for heart disease. There is a comparative dearth of information on foot pain, with a mere 38.6 million pages.
Like a parched traveler offered a drink from a fire hose, consumers face a flood of healthcare information that has morphed into “mess-information” in the past five years. Payors and physicians are among the groups that have started winnowing that information down for consumer use, driven by the advent of consumer-driven healthcare. But the next five years could see healthcare information move farther beyond the virtual reference desk.
“People don’t know how to navigate it,” Keckley says. “We did 16 focus groups in February with consumers trying to really drill into how they get information and how they sort through quality and evidence. There is a whole lot of stuff out there, but does it really change the behavior of the consumer? Is it specific to their profile? That is where the next five years becomes an exponential explosion of this mass personalization.”
Two advancing technologies outside of IT could drive better information, Keckley says. One is an improvement in biometric data equipment that can report data—from blood pressure to heart rates and blood sugar—back to the physician or caregiver. The second major change is the advancing ability to match risk and genomic factors to personal information. On the IT side, major players like IBM Corp. and Revolution Health, a Washington, D.C.-based company that is launching an array of consumer-directed healthcare offerings, are staking ground for helping consumers navigate the care matrix. “You are going to see the market peppered with consumer-facing applications, sort of like our dot-com boom days,” Marchibroda says. “Maybe it will actually take hold this time because it will have the ability to hook into real information.”
The next five years will see growing connections between what today exists separately: the personal healthcare records held by your physician or health plan and the information systems those providers and payors use to administer care. Pamela Pure, president of McKesson Provider Technologies in Alpharetta, Ga., says the pieces are in place for more convergence.
“We are just starting to invent the future right now,” Pure says. “For the first time, the technologies are affordable, the technologies are ready, and the access points are much more available and accessible, not only for physicians, but to the payors and to the patients.”
So are the days when consumers ask, “What is diabetes?” in the past? Have they been replaced by, “What are my test results and trends?” Marchibroda says no one has been able to make those connections yet, but that time is almost here. “He who is able to link those exchanges will win,” she says. “It will be a fun time to watch.”
The uninsured will become a force
Aren’t 45.8 million Americans without adequate health insurance already a force? The ranks of the uninsured outnumber the 35-million-member AARP and its lobbying clout. But despite fervent advocacy by many well-meaning groups and political organizations, the uninsured do not have nearly the force to influence healthcare policy in Washington that their numbers would suggest.
The uninsured’s influence could change in the next few years, however. In the past, as the number of uninsured grew, they remained largely within the bottom quintile of American income. But new statistics indicate a lack of health insurance is now staring the middle class in the face, as well. A 2004 U.S. Census Bureau report showed that between 2003 and 2004, the percentage of uninsured with incomes between $50,000 and $75,000 grew from 12.5 percent to 13.3 percent, while the uninsured percentage of those making less grew only a tenth of 1 percent. Unlike their fellow Americans who may not have the political organization to support them—or the time and resources to make a stink about it—the middle class is not likely to take medically induced bankruptcy well at all, says Arnold Milstein, M.D., medical director of the Pacific Business Group on Health in San Francisco. The middle class does vote, and it has assets to protect, he says.
“When someone in their family gets sick, they will lose everything—and they will get mad,” Milstein says. “Those are the seeds for a tipping point. I am not a political expert, but I am telling you it is going to happen. There is something fundamentally wrong in this country if a person’s whole life savings can vanish as a result of not making enough money to buy health insurance.”
States are certainly trying to force Washington’s hand when it comes to the uninsured. Whether it is Massachusetts mandating universal coverage, Maryland pressuring large employers or Tennessee dismantling its TennCare program, states are working to keep the uninsured manageable while hoping Washington will come to their aid. While the plight of the uninsured received a percentage of sound bites from President Bush and Sen. John Kerry in the 2004 presidential race, the issue was a blip to voters worried about the economy and the war on terror. In 2008, the economy and war may still dominate, but expect more attention to be paid to the 45.8 million people who don’t have an insurance card. “It will be impossible for the next presidential campaign not to address healthcare. And I mean coverage—not quality, not IT—but coverage,” Delbanco says.
Stakeholders will become mutually self-interested
Chances are that today, somewhere in a hotel meeting room, over chicken salad and iced tea, a healthcare leader is giving the “call to action” speech. It is likely based on a passionate, sincere belief that the stakeholders in the audience—be they medical group practice administrators, nurse managers, CIOs or health plan presidents—hold the keys to fixing healthcare. These stakeholder pep rallies serve a purpose, but everyone who listens knows that the healthcare industry is like a lifeboat: When only one side is rowing, the boat goes in circles.
An encouraging sign is that disparate groups are talking. RHIOs have encouraged competing providers to come together. Pay-for-performance programs link health plans and health systems in something other than the contentious annual contract renewal. Hospital CEOs are crossing town to talk about health improvement programs with large employers.
If nothing else, by 2011, maybe the healthcare industry will be farther along in tearing down the walls.
“We still are in silos,” Marchibroda says. “I do think the quality indicator conversation is happening apart from the electronic health record conversation. If this loose group of leaders in each of these areas comes together, we have the opportunity to make something happen, but it is not happening yet. They are beginning to. It doesn’t just happen overnight.”
Jim Molpus is editor of HealthLeaders magazine and HealthLeaders Online News. He may be reached at email@example.com
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