Pay for Performance Essay

Pay-for-PerformanceExecutive Summary:Pay for performance is a program that measures performance based payment arrangements which reward money to a specific team or individual for improved behavior or outcomes.

” The impetus behind P4P originated in the response to rising medical costs, growth in chronic care conditions, and consumer demands for efficiency and improvement in the quality of care (Bruno, 2012).” This allotted for various performances based programs to arise in the health care setting. One is Medicare’s flagship test of Pay-For-Performance.

To see if this study could work, the study examined thousands of hospitals nationwide over a three year period from the fourth quarter of 2003 to the third quarter of 2009 and will be implemented to all of Medicare’s recipient hospitals by 2012. The test’s main discovery was that hospitals below the national median did improve initially, but not overall compared to hospitals above the national median.For hospitals operating in the highest-performing percentiles, incentives known as attainment offer the hospitals the opportunity to continue their efforts and receive benefits for exceeding performance levels. The findings of the study included the supposition that hospitals that operate within communities with better-off economic and human resources achieved greater clinical process scores that hospitals located in less advantages areas over 6 years, the period of which the study was conducted. Although the hospitals that operated in locations with low economic and human resources showed the greatest increases in improvement scores, by the end of the 4 years those same hospitals did not attain scores equivalent to the advantaged hospitals (Blustein, Borden, ; Valentine, 2010, p.5).

When it came to reimbursements at the end of the study, it seemed that Pay for Performance favors the better resourced, already established, and well equipped hospitals over the ones from under-performing areas within the same cites.Question 1:The key concepts we focused on in our topic were mostly on do financial incentives improve quality in the health care setting, and how this tie into pay for performance does. More specifically, do financial incentives like Medicare’s flagship test of pay for performance improve the lowest performing hospitals compared to hospitals that are above the national median? But, first we should define what pay for performance really is or better known as P4P.

Lucia Bruno a doctor and principal shareholder of physicians’ legal group explains it very well. Dr. Bruno says, “P4P programs are performance-based payment arrangements which align financial rewards with improved outcomes and changed behavior. The impetus behind P4P originated in the response to rising medical costs, growth in chronic care conditions, and consumer demands for efficiency and improvement in the quality of care (Bruno, 2012). There are usually three types of ways P4P goes about measuring performance.They are structural measures, process measures, and outcome measures. Structural measures focus on improving key parts of a system to better the quality of a care, while process measures assesses how well a specific health care system follows evidence-based guidelines and protocols (Bruno, 2012). Outcome measures incentives are mainly based on how well a patient is doing.

In short, pay for performance is way that our health care system awards its clinicians for good structural, process, and outcome measurements.Question 2:As aforementioned, pay for performance (P4P) is an incentive in hopes of improving the overall quality, performance, efficiency and standards in general of a healthcare organization/facility. However, there are numerous studies that exist to see how effective P4P programs truly are. In other words, due to this approach/method on quality improvement being costly, these studies exist with great emphasis on whether or not they work, especially in improving lower-performing hospitals compared to the hospitals above the national median. In reference to our article, P4P programs are definitely challenged as to whether or not it is as effective as it is originally intended to be.

To challenge this, our article discusses a demonstration implemented by the Medicare program to see if a P4P can improve a lower-performing hospital.In 2003, Medicare began its flagship hospital pay-for-performance program, the Premier Hospital Quality Incentive Demonstration, which was later changed in 2006, in hopes of encouraging greater quality improvements for lower-performing hospitals (Ryan, 2012, p.797). Although these changes were created specifically for the lower-performing hospitals, evidence displayed that hospitals that already achieved high quality performance ratings above the median had the most improvements and the most benefits out of the implemented program (Ryan, 2012, p.797). With that being said, according to our article, it is safe to say that although the P4P program had the intention to improving a lower-performing hospital, it ended up not being the case. During this demonstration, there were two types of rewards within the P4P plan: incentives for high performance level known as attainments and incentives for improvements (Ryan, 2012, p.

798). Incentives for the high-performing hospitals are to encourage hospitals to continue to exemplify success, while the latter are incentives to encourage becoming better (Ryan, 2012, p.798). According to our article, providing both types of incentives in a P4P program is recommended by the Institute of Medicine (Ryan, 2012, p.798).Prior to the demonstration, studies showed that hospitals that had participated improved their scores on process measures of quality more than nonparticipants (Ryan, 2012, p798). However, in regards to the overall study, the incentive program did not improve the lower-performing hospitals as much as it improved the high-performing hospitals.

Our article relates to our topic of “Pay-for-Performance” under the basis that it discusses about its intended effects. In other words, although according to the article the P4P program did not improve the lower-performing hospitals as much as it benefitted the higher-performing hospitals, it still supported the fact that P4P programs work. “Pay-for-performance is an important market-based approach to improving health care quality” (Blustein, 2010, p.3).According to our supporting article, I came up with the conclusion that the Medicare P4P program demonstration in our main article had its expected results due to the idea that the lack of resources can play an important role.

In other words, “payment based on performance may worsen inequalities, as hospitals in under resourced areas lose funds to their better-off counterparts” (Blustein, 2010, p.3). In my opinion, this is what the main article was experiencing between the higher-performing hospitals versus the lower-paying hospitals. “The pay-for-performance assumes that providers have adequate economic and human resources to perform, or improve their performance, within a short time frame” (Blustein, 2010, p.3). This factor played a huge role hence the reasoning as to why it seemed like the P4P program couldn’t help improve the lower-performing hospitals as much as it did for the higher-performing hospitals.My team felt the same way as to why our main article had its expected results.

We have to take into consideration the difference in socioeconomic situations. In other words, it is agreeable amongst us that the here in the States, hospital revenue comes from a variety/mix between private and public health insurance payments that is dependent of the socioeconomic conditions (Blustein, 2010, p.3). With that being said, one hospital might benefit more from the P4P program due to higher funds from a nicer community serving those with private insurance versus a hospital serving those with limited to zero insurance.

The majority of the team also agrees that although P4P programs are intended to improve quality within healthcare it does not necessarily mean that it is a solution to other underlying issues regarding standards of quality.Question 3:When viewed in terms of the application the Pay for Performance program to an actual organization, it has been proven that the incentive program does not work to universally improve the quality of healthcare, as it was originally envisioned. The Pay for Performance program is at its most central concepts a way to increase quality of healthcare by using the “results of quality metrics to set amounts of incentive payments for Medicare providers who achieve certain levels on these metrics” (Lighter, 2012, p.13). For hospitals operating in the highest-performing percentiles, incentives known as attainment offer the hospitals the opportunity to continue their efforts and receive benefits for exceeding performance levels. For under-performing hospitals conversely, the incentives to improve are intended to encourage them to do better and get up to par with the already well performing hospitals (Ryan, Blustein, & Casalino, 2012, p. 798).

As indicated by the implementation of past Medicare healthcare reimbursement programs, such as Diagnosis Related Groups and Capitation, first by Medicare, and sequentiallyby a variety of other payers (Lighter, 2012, p.13), it is important for Pay for Performance to take hold and quickly improve the quality of healthcare wherever it is employed. The study of how Pay for Performance is related to the actual performance of hospitals was conducted by Blustein, Borden, and Valentine; the study consisted of over 2700 hospitals and used county-level assessments of local economic and workforce resources such as the poverty, unemployment, and education levels of members of the surrounding communities, as well as a measurement systems that was used to evaluate “seven process measures that can be successfully met by a physician order or chart notation (2010, p. 3). These process measures included whether or not aspirin or a beta-clocker was administered at admission and/or discharge, among others, for the health conditions Acute Myocardial Infarction and Heart Failure (Blustein, Borden, & Valentine, 2010, p.2). Of the over 2700 hospitals surveyed 873, or 33 percent, were in a county that was described as “locationally disadvantaged, or meeting one or more of the following criteria: “persistantly poor, high unemployment, high prevalence of non-high school graduates in the workforce, and lowest quartile college educated” (Blustein, Borden, & Valentine, 2010, p.

3). The findings of the study included the supposition that hospitals that operate within communities with better-off economic and human resources achieved greater clinical process scores that hospitals located in less advantages areas over 4 years, the period of which the study was conducted. Although the hospitals that operated in locations with low economic and human resources showed the greatest increases in improvement scores, by the end of the 4 years those same hospitals did not attain scores equivalent to the advantaged hospitals (Blustein, Borden, & Valentine, 2010, p.5). So, it seems Pay for Performance favors the better resourced, already established, and well equipped hospitals over the ones from under-performing areas within the same cities. Staffing a hospital becomes considerably difficult for an under-performing hospital when “poverty, limited spousal employment, and sub-par schools” in the areas immediately surrounding areas do not attract the top “physicians, nurses, pharmacists, and other clinicians” to work at the hospitals (Blustein, Borden, & Valentine, 2010, p.2). The fact that the hospitals which gained the biggest increases in terms of quality scores still could not match the levels posted by the already established hospitalsindicated that instead of providing a program in which the growth of the quality of healthcare is universally promoted, pay for performance serves as a tool that widens the gap of quality of healthcare within varying hospitals.

It cannot be overstated how different it is for a hospital to be recognized for their efforts and achievements, versus a hospital that being incentivized to just come up to par. At a certain point mental factors, in addition to the already established economical and personnel factors, have to contribute to the process of why those under-performing hospitals cannot seem to dig themselves out of a hole. It is pointed out in the study by Blustein, Borden, and Valentine (2010) that if some hospitals are viewed as being disadvantaged under the payment system, materials such training and onsite visits, as well as other forms of technical assistance, can be provided to boost improvement scores (p.9). Paying for improvements to the results of provided healthcare, however, does nothing for the surrounding factors that contribute to the hospitals failures; at a certain point, the hospitals become nothing more than products of their environments.Question 4:Overall pay for performance programs are great mechanisms to implement in the healthcare world today. When using these particular programs we able to add structure and well as great working process in order to deliver top quality care to patients.

We are establishing in the healthcare world accountable to the healthcare system in adding pay for performance programs. We are no longer comfortable with providing just standard level of care; we are no longer accepting errors and being ok with these particular findings. With this being said throughout our research and findings we have come across particular case studies that demonstrated how pay for performance programs have made their impact on hospitals. With these findings we also saw that there are many restraints that can hinder pay for performance programs to in order for them to flourish in a healthcare organization. Many of these restraints came from the particular locations of the healthcare organization as the resources that many of these particular organizations had available to them. For instance, in one particular case study done by Blustein, Borden, and Valentine they had found that reimbursement was higher in most advantaged locations than those in the least advantaged locations. It wasalso found in this particular case study that hospitals that lacked in resources fared poorly and that when the case studied continued many of these particular hospitals that lacked in resources continue to fare poorly because of this (Blustein, Borden, Valentine, 2010, p.

4). However with these particular challenged that many hospitals are faced with the lack of resources and the non-favorable locations many of these hospitals over the continue case study showed more improvement over the four year period by the end of the study. But still with these findings with implementing pay for performance programs these particular hospitals still lagged behind in improvement from the other hospitals that had the advantages of resources and good location available to them (Blustein, Borden,Valentine, 2010, p. 5). While researching some other restraints dealing with pay for performance we came across staffing as being a restraint. For instance, even though employees did not play a key role in improving hospital status they still had some type of effects of the outcomes with reimbursement that the hospitals would get back.

Furthermore, with having a strong talent group to get ideas going they can contribute their strengths to the organization (Blustein, Borden, Valentine, 2010, p. 7). With that being said if you do not have a team that is willing to take initiatives and willing to step up to improve the organizations this could also damage the process in improving the weak areas in the that particular organization. The lessons that we took away from doing our research is that pay for performance programs are definitely needed in the healthcare world. However, with implementing these programs in facilities there will be challenged that many organizations are going to face to actually see an improvement. Some challenges that many healthcare organizations will face is the lack of funds, locations, even as well as the staff that works at that particular organization.

Pay for performance is now becoming an industry standard and norm of the healthcare world (Lighter, 2011, p. 13). We must as healthcare professionals find a happy median when it comes to pay for performance; because this mechanism affects both payer and customers (Lighter, 2011, p. 14). Research had found that customers are interested in having more face to face time with physicians while the payer is more concerned with what type of brand name or class of drug was prescribed (Lighter, 2011, p. 14). All in all we as future healthcare professions must find ways in improving the quality of healthcaredelivered to patients; and pay for performance is one of the major mechanisms that will provide check and balances in improving the quality of care that is being delivered.References:Blustein, J.

, Borden, W., & Valentine, M. (2010).

Hospital performance, the local economy, and the local workforce: Findings from a US National Longitudinal Study. Plos Medicine, 7(6), 1-12. doi:10.1371/journal.pmed.1000297 Bruno, L (2012, May 3rd).

Pay-for-Performance Incentives in Healthcare: Purpose, Politics and Pitfalls. Retrieved from http://www.physiciansnews.

com/2012/05/03/pay-for-performance-incentives-in-healthcare-purpose-politics-and-pitfalls/ Lighter, D. E. (2011). Performance improvement in health care. Sudbury, Massachusetts: Jones and Bartlett Publishers Ryan, A.

, Blustein, J., & Casalino, L. (2012). Medicare’s flagship test of pay-for-performance did not spur more rapid quality improvement among low-performing hospitals. Health Affairs, 31(4), 797-805.

doi:10.1377/hlthaff.2011.0626

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