Pay-for-performance must measure up

While health plans push such programs, the AMA House of Delegates insists that effective safeguards be put into place.

Editorial. July 18, 2005.

Physicians are smart to be wary when certain parties try to seize the rhetorical high ground. Such is the case with so-called pay-for-performance.

Both in the abstract and in the reassuring descriptions from government and private payers, pay-for-performance suggests that the best -- and who in medicine thinks of himself or herself as anything less? -- will reap the rewards that are their due. Even the rest -- whoever that might be -- can expect proper incentives to do the right thing. Meanwhile, the broader pitch to policy-makers, corporate payers and the public is of a cost-effective remedy that will reshape health care for the better.

And yet there is a dreary history to health plans' high-concept hard sells. How could anyone ever have found fault with something as wholesome as a "health maintenance organization"? Why quibble with what's "usual, reasonable and customary?" And what could be as fundamentally sound as a "sustainable growth rate"? HMO, URC and SGR: Meet PFP.

Delegates at the recent AMA Annual Meeting did what bitter front-line experience has taught them to do: They looked at what lurks beneath the high-sounding language of this latest new thing.

In crowded and lengthy sessions, the delegates affirmed a strong set of AMA policies on pay-for-performance. In contrast to the brief and bland phrase that inspired their action, the AMA's concerns take four pages of text to address how legitimate PFP should work, and the wording is blunt.

At its core are five guiding principles, unveiled earlier this year, which establish that an ethical and fair PFP program must: