Health Care and Insurance

Doctor report cards may boost care, pay: New pay-for-performance model prepares for testing

January 22, 2007

The designers of a pay-for-performance plan for doctors are about to put their theories to work.

The Quality Health 1st of Indiana program will start testing its unique system for measuring performance in the next three months, and it might lead to bonus payments for doctors by the second half of 2007.

Big in-state insurers like M-Plan Inc. and Anthem Blue Cross and Blue Shield of Indiana back the initiative, and several large doctor groups have signed up, too, said Dave Kelleher, executive director of the Employers Forum of Indiana, an initiative put together by businesses to lower the cost of health care and improve quality. The forum helped design Quality Health 1st.

So far, six of the seven largest primary care groups in central Indiana have agreed to participate, Kelleher said. That encompasses roughly 60 percent of the primary-care physicians in the market.

Doctors could qualify for bonuses of $10,000 to $20,000 annually if they fare well under Quality Health 1st's quality reports.

The reports will be based on several sources of data. Insurers will submit claims information. The Indiana Health Information Exchange, a not-for-profit collaboration among the state's largest health care providers, will contribute clinical data it collects through its network and then compile the reports.

Those reports include 28 doctorselected categories that track an array of conditions, including the treatment of heart attack victims and diabetics. Several categories focus on chronic illness or conditions for which preventive medicine can ward off steep medical bills.

Insurers will use a handful of them to determine whether a doctor deserves additional pay.

Doctors also will receive the reports and more specific feedback on patients. If, for example, a report shows that a doctor has a high percentage of diabetic patients with poor blood sugar control, the physician receives a list of their names.

"That's the beauty of this," said Dr. David Lee, vice president of health care management for Anthem Blue Cross and Blue Shield of Indiana. "It's not just, 'OK, Doc, you got an A, B, C or D,' but here's some information to help you improve your overall score."

Insurers will cover the $2 million annual bill to run the system, as well as hand out bonuses. They're happy to do so because they think measures like this will create a "self-generating cycle" that lowers costs, Lee said.

Doctors, in turn, are happy to get the extra money.

A $20,000 bonus works out to roughly a 13-percent raise for a typical primary care physician.

The extra money could give a boost to many doctors who feel trapped in a system that emphasizes patient volume over care quality.

That system forces them to funnel greater numbers of patients through their office to keep pace with the rising cost of business, said Dr. Timothy Hobbs, CEO of Community Physicians of Indiana, one of the networks that agreed to participate in Quality Health 1st.

"We call it the practice treadmill," he said. "The only thing you can do is keep trying to run faster on the treadmill to keep up.

"Pay for performance allows you potentially, if done correctly, to slow that treadmill down and pay more attention to some of the elements of care that are important."

Programs that focus on pay for performance have grown around the country over the past decade, said Dr. Gregory Larkin, chairman of the Employers Forum. The physician community sees most as a push by payers to cut costs.

However, he and Kelleher say the Quality Health 1st program stands apart from that pack. It's unique because several insurance carriers are participating. It also uses claims data and clinical information like lab reports to give doctors more detailed feedback than normal.

"Without these types of programs, all doctors-regardless of their efforts to be ... attentive to the health care needs of their patients-are paid the same," Larkin said.
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