Pay for Performance: An Idea Whose Time Has Come?

T he topic of pay for performance created a lot of buzz this past winter at the American Academy of Dermatology’s meeting in New Orleans. A lot of this buzz centered on concern about having yet more standards to meet, documentation to complete and expense to incur in order to participate in such a compensation plan. But mostly, the deep-down concern that many dermatologists are likely to have — as well as many other physicians — is the potential for pay for performance to create a two-tiered system that would leave some physicians on the outside looking in. The Gist of Pay for Performance The idea behind this compensation system, reports managed care expert Gil Weber, M.B.A., and author of this month’s cover story on pay for performance, is that “if physician performance can be accurately measured, categorized and reported, then health plans will have an objective means by which to pay more to better performing physicians and hospitals, and patients will have an objective means by which to select their providers.” Addressing Concerns What physicians worry about regarding this compensation system, adds Mr. Weber, is the thought of having to “spend huge amounts of money to integrate practice management software with different payer systems to meet each plan’s particular standards for performance.” A deeper concern is about what happens if physicians participate in a pay for performance plan and their performance isn’t deemed “superior”? Will they be suddenly left on the outside looking in? Diane Thaler, M.D., who is employed by an HMO in Wisconsin, is skeptical that pay for performance plans will benefit physicians. “The main questions we need to ask,” explains Dr. Thaler, are ‘who will profit and who might be hurt by this?’” Dr. Thaler continues, “When you start defining endpoints, then that’s what everyone focuses on,” often to the detriment of patients. It’s Coming Whether You Want It To or Not Some plans are already in place and many more are sure to come. In addition, a U.S. Senate bill is soon to be introduced that will focus on pay for performance recommendations. Also, at its annual meeting last month, the American Medical Association officially adopted principles and guidelines on pay for performance. According to American Medical News, the AMA will “oppose private-payer, congressional or Centers for Medicare & Medicaid Services pay for performance initiatives if they do not meet the AMA’s ‘Principles and Guidelines for Pay for Performance.’” This move is an attempt to come out against plans that purport to focus on quality care but really are only focused on saving money. Now is the time to have a say on this topic — before it’s too late. For more on pay for performance, see our cover story beginning on page 38. Larisa Hubbs Executive Editor lhubbs@hmpcommunications.com

T he topic of pay for performance created a lot of buzz this past winter at the American Academy of Dermatology’s meeting in New Orleans. A lot of this buzz centered on concern about having yet more standards to meet, documentation to complete and expense to incur in order to participate in such a compensation plan. But mostly, the deep-down concern that many dermatologists are likely to have — as well as many other physicians — is the potential for pay for performance to create a two-tiered system that would leave some physicians on the outside looking in. The Gist of Pay for Performance The idea behind this compensation system, reports managed care expert Gil Weber, M.B.A., and author of this month’s cover story on pay for performance, is that “if physician performance can be accurately measured, categorized and reported, then health plans will have an objective means by which to pay more to better performing physicians and hospitals, and patients will have an objective means by which to select their providers.” Addressing Concerns What physicians worry about regarding this compensation system, adds Mr. Weber, is the thought of having to “spend huge amounts of money to integrate practice management software with different payer systems to meet each plan’s particular standards for performance.” A deeper concern is about what happens if physicians participate in a pay for performance plan and their performance isn’t deemed “superior”? Will they be suddenly left on the outside looking in? Diane Thaler, M.D., who is employed by an HMO in Wisconsin, is skeptical that pay for performance plans will benefit physicians. “The main questions we need to ask,” explains Dr. Thaler, are ‘who will profit and who might be hurt by this?’” Dr. Thaler continues, “When you start defining endpoints, then that’s what everyone focuses on,” often to the detriment of patients. It’s Coming Whether You Want It To or Not Some plans are already in place and many more are sure to come. In addition, a U.S. Senate bill is soon to be introduced that will focus on pay for performance recommendations. Also, at its annual meeting last month, the American Medical Association officially adopted principles and guidelines on pay for performance. According to American Medical News, the AMA will “oppose private-payer, congressional or Centers for Medicare & Medicaid Services pay for performance initiatives if they do not meet the AMA’s ‘Principles and Guidelines for Pay for Performance.’” This move is an attempt to come out against plans that purport to focus on quality care but really are only focused on saving money. Now is the time to have a say on this topic — before it’s too late. For more on pay for performance, see our cover story beginning on page 38. Larisa Hubbs Executive Editor lhubbs@hmpcommunications.com