Rewarding quality care: Physicians should set the standards

Incentives for providing quality care are the latest thing, but only physician involvement in standards will ensure that such programs are legitimate.

Editorial. Jan. 6, 2003.

You get what you pay for, the saying goes, so managed care plans and the federal government alike figure that if they want physicians to provide high-quality care, they should reward them for it with financial bonuses. Improved quality is expected to lower utilization rates and thereby reduce health care costs.

This well-intended proposition may very well live up to its potential -- it sure sounds good on paper -- yet physicians are right to view it with a somewhat skeptical eye.

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Certainly, many physicians soon will have the chance to get a closer look. The Center for Medicare & Medicaid Services is now instituting a three-year demonstration project for groups of 200 or more physicians. It will pay groups a bonus for meeting certain quality benchmarks, as well as have them share in any savings resulting from better quality of care. The program got extra backing in October 2002, when the National Academy of Science's Institute of Medicine released a report saying the federal government should reward high-quality health care by giving financial rewards to the best doctors, hospitals, nursing homes and HMOs.

Blue Cross of California in 2003 is expanding to its PPO the pay-for-performance program it already has in its HMO. Blue Cross and five other large California plans have said they will adopt at least some of the quality criteria for rewarding physicians that have been developed by Integrated Healthcare Assn., a California-based health policy group. Other plans across the country are developing, or already have, some form of quality-based pay.

On the surface, this movement of pay for performance seems to be an improvement over some plans' strategy of paying bonuses to physicians based on how much money they could save the plan. That structure was rightly criticized by physicians as more often intended to provide the least care rather than the right care. And pay for performance has the potential, depending on the bonus structure, to align physician and payer interests in providing the best care for the least cost.

However, when it comes to pay for performance, the question is: Who is defining quality? Any quality-pay structure that is developed without physician input is doomed, because there will be questions over whether it truly represents quality, or if it's a mask for cutting costs by cutting care.

As a report on the subject by the AMA Board of Trustees noted last year: "Physicians and other health care professionals express serious concerns over the use of data by coalitions and health plans to make clinical practice decisions and guidelines without the input or consent of physician groups, hospitals, medical staffs and/or organized medicine. ... Such determinations can be particularly damaging if they are improperly linked to the use of economic or practice incentives for particular care regimens and disincentives for other treatment options."

This is largely uncharted territory. The IHA did consult physicians in the development of its standards. In this instance, the standards include scoring a physician's or group's quality with a 50% weight on clinical measures such as child immunization rates, cancer screening rates and treatment of chronic conditions; 40% on patient satisfaction surveys; and 10% on technological capabilities.

But that doesn't mean the plans involved with the group's efforts don't also have other, more questionable standards in mind. Doctors in California, for example, note that Blue Cross' quality-pay plan contains such criteria as willingness to accept new patients -- even if a practice is overbooked -- and a greater rate of prescribing generic drugs.

Physicians discovered quality long before there was an HMO or a PPO or a CMS. In their daily lives and physicians still strive to give the best care they can. That it be the basis for getting back some of the money they have lost to pay cuts will likely be viewed as a welcome, if slightly bittersweet, turn of events. But if CMS and health plans are serious about this proposition, the only credible proof of their goodwill will be if those at the front line of caring for patients have a strong voice in defining what quality is.