Pay-for-performance benefits are unproven, panel says

Success is contingent on physicians believing that the goals are fair, the measures appropriate, performance accurately tallied and the incentives worthwhile, a report to Congress finds.

By David Glendinning, AMNews staff. Nov. 27, 2006.

Washington -- Those who trumpet the future of pay-for-performance as a way to improve care while lowering costs don't yet have the evidence to prove their case, according to a new report commissioned by Congress.

The Congressional Research Service, an arm of the Library of Congress that conducts studies for lawmakers, recently looked into the concept of paying physicians and other health care professionals based on how well they meet quality standards, rather than just on how much care they provide.

Scores of pay-for-performance initiatives, also known as "value-based purchasing" programs, exist in the public and private health care sectors, and their numbers are growing. But whether they are working as intended remains unclear, CRS said. The reason is that few objective studies have looked into whether the incentives to doctors and other health professionals result in better care for patients and lower costs for those paying the bills.

"Initial studies suggest that pay-for-performance programs can change performance on quality measures that are used for the basis of bonus payments, but claims that pay-for-performance programs are cost saving in the long run are largely unsubstantiated," writes lead author Jim Hahn, a CRS health economist.

Getting to the bottom of the quality and savings questions could be tough. Determining whether a certain health care practice produces good results usually requires conducting randomized, controlled studies -- something that rarely would be possible for a social policy such as pay-for-performance, Hahn states.