Real data and real results tell the story of the pay-for-performance movement, but market specialists say it starts with the vision of what an organization aspires to be and the priorities it sets.

Still burgeoning as a payment model, P4P has taken various shapes in its genesis, though it is primarily intended to nudge providers toward quality and efficiency with financial rewards. Medicare’s Physician Quality Reporting Initiative serves as a P4P template for providers to follow. Yet experts recommend each organization customize its own program according to its goals.

As John MacDonald, managing director of Devon, Pa.-based LECG SMART explains: “To make P4P work, you have to invest time and money to make sure that you are able to measure performance in line with the organization’s philosophy about pay, business objectives and goals. It depends on what you want to accomplish and the level involved.”

Any well-designed IT system can serve as the infrastructure for P4P, MacDonald said – the key is in the planning. Determine a set of metrics to measure and keep it small, he said.

“Too many metrics is too diluted. You won’t be able to do much with it,” he said. “Usually two to four metrics is enough and customer satisfaction should be one of them. This is something that should be qualitative rather than quantitative.”

The metrics should be specific, but should also be tailored for each individual’s responsibility, MacDonald said.
“You can’t just plug in the same numbers for everybody – similar maybe, but they should vary depending on what the team is doing and what you want them to accomplish. These metrics should be subjective with some shades of gray, but you should ultimately be able to say ‘yes, we did it or no, we didn’t do it.’”

For Summit Medical Group in Berkeley Heights, N.J., instituting a P4P system means the largest multi-specialty physician practice in the state is on its way to becoming an accountable care organization, said chief medical officer Robert Brenner, MD. With 10 offices in central New Jersey, the group has 165 doctors in its organization.
Introducing a process like P4P into an established physician culture is not easy, Brenner said, because it deviates dramatically from the routines doctors learn in medical school. Moreover, P4P changes the entire payment dynamic and that takes some adjustment, he said.

“Physicians are trained for productivity,” Brenner said. “The current healthcare system doesn’t reward outcomes in patient care, it rewards seeing lots of patients.”

Using PQRI metrics and a clinical quality solutions system linked to Chicago-based Allscripts, the Summit Group received $239,000 from CMS last year under a Medicare formula that pays 2 percent more to providers that use the outcomes measurements. Among the metrics used are hemoglobin and lipid levels in diabetics, post-operative infection rates and systolic blood pressure levels.

Each year the clinic holds back 5 percent of its compensation amounts and distributes it to the physicians that show improvement in quality metrics. The group also backs gain sharing plans with hospitals in which both organizations should split the residuals from efforts to prevent patient admissions.

P4P ‘Here to stay’

When the PQRI movement started in 2007, Atlanta-based Ingenious Med immediately “jumped on the bandwagon,” said Steven Liu, MD, chairman and founder.

As a result, the company created a P4P module that creates core measurements and has increased its functionality in preparation for what Liu expects to be an escalating number of adoptions.

“P4P is absolutely here to stay and getting tweaked more and more to handle widespread pilot programs,” he said. “P4P will get bigger not just because the government is pushing it, but because so many changes are happening in healthcare finance – margins are tighter, so if they focus on P4P, it will generate more revenue.”
Carmel, Ind.-based Zotec Partners sees its role in the P4P as providing the “pay in pay for performance,” said CEO Scott Law.

“We offer ideas to clients with the data we’ve amassed over the years,” he said. “We have a lot of information to bring to bear, including outcomes, clinical information, patient satisfaction and quality.”

Zotech software performed more than 40 million radiology transactions last year, which accounts for 6 percent of the marketplace, Law said.

“That data can be sliced and diced to include diagnosis code, reports, procedures and demographic information,” he said. “There are quality tracking mechanisms for PQRI and we help clients with those requirements.”

One of the major challenges Law sees for P4P going forward is standardization.

“Each carrier will have its own version of P4P, so getting it standardized should be the first thing to happen,” he said. “Healthcare reform requires P4P, but it will be up to the individual states and intermediaries to determine.”
For connectivity and analytics, Indianapolis-based Bostech serves as the platform to link physicians and hospitals with labs and manages the labs’ workflow to send reports into electronic medical records systems. The company recently launched an agreement with local biopsy evaluation firm Know Error for quality assurance on tests.

“The system provides a work list of what they need to do, workflow optimization that augments and connects with the systems for ordering the lab test, accessing, processing and returning the report to the physician,” said CEO Brad Bostic. “This fits the P4P model because clinics can boast they perform tests faster and more accurately to provide optimal outcomes.”