Large physician bonuses in pay-for-performance reimbursement arrangements are associated with improvement in evidence-based care.

Pay-for-performance arrangements for physicians that feature large bonus payments can have a positive impact on clinical quality, research published today suggests.

As the healthcare sector shifts from volume-based payment models to value-based models, pay-for-performance reimbursement for physicians has become increasingly widespread. The most ambitious pay-for-performance program in the country is the Merit Incentive Payment System enacted under the Medicare Access and CHIP Reauthorization Act of 2015.

Big bonuses are hard for physicians to ignore, the lead author of the research published today in Journal of the American Medical Association told HealthLeaders.

"Increasing bonus sizes brings more attention from clinicians to quality metrics on which they are being measured. More attention may lead to better follow through and achievement of specific quality metrics, especially those that are process oriented. In some cases, the dollars may get invested in infrastructure, processes, or information technology that helps deliver better quality care," said Amol Navathe, MD, PhD, Department of Medical Ethics and Health Policy, Perelman School of Medicine, University of Pennsylvania, Philadelphia.

When Navathe and his research team added two behavioral economic factors to their study—increased social pressure and loss aversion—there were no gains in pay-for-performance effectiveness, he said.

"It should be noted however that increasing bonuses has not uniformly led to higher quality of care, which is one reason we tried to bring in behavioral economics to get more 'bang for the buck.' In our study, the behavioral economic designs did not seem to add to the return on investment."

Patients should be the primary concern when structuring bonus payments, Navathe said.

"There are several considerations, but chief among them is aligning the bonuses with what is best for patients. Components of P4P programs like quality metrics and the data underlying them are imperfect, so employers and payers should be mindful that the entire program design should emphasize activities that are good for patients—without putting physicians and patients at odds with good care. This may mean emphasizing areas where we feel more confident about the quality metric, the data underlying it, and the lack of unintended effects."

Gauging impact of bonuses

Navathe's research team examined the proportion of 20 evidence-based quality measures achieved. There were 33 physicians and more than 3,700 patients included in the study's analysis.

Larger bonus size was linked to a greater increase in evidence-based care than a control group. Three individual measures of evidence-based care showed improvement under large bonus size arrangements: blood pressure control, conducting a foot examination with a diabetes diagnosis, and tobacco cessation.

In the study, the mean size of annual bonuses given to physicians was $3,355.

"We found an increase in bonus size was associated with significantly improved quality for patients receiving care for chronic disease relative to a comparison group during a single year," Navathe and his team wrote.

Leonardo Lozada says health systems and hospitals generate benefits from connecting with the communities they serve.

Detroit Medical Center recently appointed a Kansas City–based physician executive as the organization's new chief medical officer.

Leonardo Lozada, MD, MBA, who officially began his CMO role at DMC in January, came from St. Luke's Health System, where he served as senior vice president and chief physician executive.

DMC, located in downtown Detroit, is an academic integrated health system with more than 2,000 licensed beds and 3,000 affiliated physicians.

Lozada says several duties at St. Luke's helped prepare him for the new position in Detroit, including building a primary care–focused multispecialty group from scratch, creating and operating the St. Luke's Care clinically integrated network, and managing a community-based approach to care.

"The hospitals were important, but we were embedded in the community with about 70 physician offices. We also had seven micro-hospitals that provided emergency and urgent care with eight to 10 inpatient beds to establish what we called neighborhood care," he says.

Lozada is a trained anesthesiologist. He completed his residency at Cleveland Clinic, and conducted a fellowship in neuro-anesthesiology at Mayo Clinic.

HealthLeaders recently spoke with Lozada to discuss his leadership goals at DMC. Following is a lightly edited transcript of that conversation.

HealthLeaders: There are many distressed neighborhoods in Detroit. How do you view social determinants of health?

Lozada: Good health is not something that you acquire from one day to the next. Health is something that individuals and communities work on constantly. Social determinants of health such as whether someone has electricity, running water, transportation or access to a grocery store or not—all of those elements factor in.

We focus more on health maintenance than health treatment and recuperation. That's why it is important for us to integrate into our communities, so we are a force within our communities.

HL: How do health systems and hospitals integrate with communities?

Lozada: At a high level, you participate in community boards at organizations that benefit large segments of the population. These boards include boards of education, grassroots boards related to security, and youth athletics boards. That's the easiest entrance into a community—through the leadership.

HL: Does DMC have a role to play in decreasing gun violence in Detroit?

Lozada: Health systems have to be embedded in the community to determine health, whether that health is psychological, educational, physical, or emotional. The role of health systems today is preventing any type of patient contact with healthcare providers, including gun violence. 

Gun violence has gone down in Detroit, and we think it is partly because we are embedded in our communities and we are asserting a sense of awareness about how gun violence can be curbed.

HL: What are your top priorities for clinical care at DMC?

Lozada: Care coordination is a priority at DMC, but I would like to see coordination of care hardwired through electronic records and through participation in clinical excellence groups across employed physicians as well as independent physicians. 

Another issue is access to care in the community. We want to have portals of entry for our patients, so they can achieve standards of health rather than receiving care for treatment of diseases.

I want to extend the information we give to the family members of our patients who are most vulnerable so they can have a better understanding of when to access our EDs and other care sites. Patients who are at the most vulnerable state require a transformation in the way they live so they can achieve and maintain health, rather than fall into a cycle of treatment-health-disease, treatment-health-disease.

We need to have a primary care strategy. We want our patients to go to their primary care offices more readily than they would go to our specialty care. We would like to have our specialty physicians more coordinated with our community physicians, so there is a mechanism to join care between the community and the hospital.

HL: In your role as CMO, how do you foster physician leadership?

Lozada: In the medical staff, leadership development is a continuous project. I see leadership in medicine as a series of areas that I work on with physician leaders who are already in place. I also work with the physicians who are coming up through the ranks, so they can become leaders in their own right.

[These leadership areas are]:

1. Relational leadership features physicians coordinating with other specialties. Particularly in primary care, relational leadership builds trust within the medical community.
2. Contextual leadership involves the role that the physician plays in the life of the patient, the life of the community, and the life of the health system. Contextual leadership is a byproduct of a sense of community.
3. In supportive leadership, physician leaders build a sense of initiative in the younger generation of clinicians. We want our younger physicians to constantly seek out best practices and implement those best practices day in and day out.
4. Inspirational leadership comes through example. As our physicians develop inspirational leadership, they provide a sense of "follow me" in the journey of healthcare. It is ever-changing like a great hike through the woods. In healthcare, there is new scenery every month. In inspirational leadership, physician leaders train other physicians to have a sense of excellence.
5. Responsible leadership allows us to develop a sense of stewardship within the organization. We're here for a limited amount of time; and in that time, we want to develop and create an organization that is better than when we took it over. That is the best way to pay homage to those who have preceded us.

The health system creates a chief population health officer position to lead new division: Sutter Population Health Services.

Sutter Health has appointed its first chief population health officer.

Christopher Stanley, MD, MBA, started Monday in the new role at the Sacramento, California-based health system.

Stanley will be leading Sutter Population Health Services, a new division at Sutter that focuses on the clinical support structure needed to provide high-value care to employers, payers, and individual patients. Sutter Population Health Services is also designed to improve non-medical aspects of care that affect health.

"Dr. Stanley will closely partner with leaders and teams already employing innovative solutions to advance care coordination, eliminate duplication of services, and improve the patient experience across the full continuum of our integrated network," Rishi Sikka, MD, president of Sutter Health System Enterprises, said in a prepared statement.

Stanley is joining Sutter from Navigant Consulting, where he was a director in the Healthcare Value Transformation practice. His other experience includes working as vice president of care management at Englewood, Colorado-based Catholic Health Initiatives (CHI). He began his career as a pediatrician at Indian Crest Pediatrics in Denver.

New leadership position

In recent years, several health systems have created C-Suite roles for population health executives.

Last year, Cleveland Clinic appointed Adam Myers, MD, MHCM, FACHE, as chief of population health. Myers has a dual set of responsibilities—managing population health to increase capacity for highly complex care and leading Cleveland Clinic Community Care, a new population health approach at the organization.

Cleveland Clinic Community Care features several elements of the health system, including primary care internal medicine, primary care pediatrics, family medicine, the organization's clinically integrated network of more than 6,000 physicians, Express Care, and the Center for Value-Based Care Research.

Primary care is a crucial component of Cleveland Clinic's blueprint for population health, Myers told HealthLeaders in July.

"I have the strategic and directional role of population health that will work with our primary care-focused efforts and our specialty institute partners. Then there's Cleveland Clinic Community Care, which is the operating nuts and bolts of primary care for the communities we serve," he said.

Value-based care veteran

While he was with CHI in 2015, Stanley contributed his thoughts to a HealthLeaders magazine cover story about value-based payment models. He offered perspectives on several topics.

• He said large health systems have an advantage in developing value-based care because they can experiment on their own employees in redesigning care and finding innovative ways to pay for services based on value. "We are using our own employees as a kind of a canary in the coal mine," Stanley said of the CHI rollout strategy for value-based payment models.
   
• Patient-centered medical homes were generating patient engagement gains at CHI, he said. "We are now identifying patients who are in need of care but are not following up the way they should. Using data to identify gaps in care, we are now making direct outreach to them and conducting collaborative interviews to get patients to take more direct care ownership."
   
• Physicians who received training in population health and patient-centered care stepped into leadership roles in the shift from volume to value at CHI, he said. "They're the champions. They're the leaders. They're the torchbearers."
   
• Bundled payments were a popular value-based model with CHI physicians because of their relative simplicity, Stanley said. "There's a clear start and clear finish to when that episode occurs. Specialists can understand their sliver of care: procedure preparation, procedure, then procedure follow-up through a 90-day recovery period."

A decrease in utilization of postacute care facilities accounted for most of the reduced spending on hip and knee replacement procedures in the CJR program.

In the first two years of Medicare's mandatory bundled payments for hip and knee replacements, spending per episode decreased slightly without increased complications, recent research shows.

Bundled payments are one of the most widespread forms of value-based reimbursement in the country, with both government and commercial programs.

The researchers focused on Medicare's Comprehensive Care for Joint Replacement (CJR) program. The mandatory hip and knee episodes of care were launched in 2016. Last year, there were about 465 hospitals in the program.

"The CJR program helps address the question of whether savings seen in previous evaluations of bundled-payment programs were attributable to the select nature of the hospitals that volunteered. Our findings suggest that the changes observed in voluntary programs may be echoed in mandatory programs," the researchers wrote.

Based on Medicare claims data from 2015 through 2017, spending on joint replacement episodes under mandatory bundles decreased more than a control group of hospitals—falling $812. The researchers found that the reduced spending was linked to a 5.9% decrease in utilization of postacute care facilities.

Hospitals benefit from engaging postacute care partners, the lead author of the research told HealthLeaders recently.

"Strategies that hospitals appear to be taking include forging closer connections with skilled nursing facilities to understand the rehabilitation needs of their populations, and having a more disciplined, systematic approach to discharge planning and rehabilitation assessment," said Michael Barnett, MD, MS, an assistant professor of health policy and management at Harvard T.H. Chan School of Public Health.

Management of postacute care paid off financially for top performers in CJR, he said.

"By far the biggest source of reductions in spending came from lower use of SNFs and inpatient rehabilitation facilities. This was counterbalanced by an increase in the use of home health services, which are naturally much less expensive. Hospitals that saved money focused on how they could send patients home who may not have needed the intensity of rehabilitation," Barnett said.

Mandatory bundled payments programs appear to generate significant spending reductions, he said. "As long as patients continue to receive the highest quality care, saving money is a big advantage of mandatory bundles because we know that growth in Medicare spending continues to squeeze the entire federal budget."

More effective management of postacute care is another benefit of mandatory bundles, Barnett said.

"A large advantage is if patients begin receiving more deliberately coordinated and organized care to provide the right level of care to have excellent outcomes. If someone can spend time at home recovering from surgery instead of a nursing home, I think most patients would view that as a success."