Pay for Performance

Posted: March 26th, 2020

Pay for Performance

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Pay for Performance

Pay for performance in healthcare is a measure of payment that takes into consideration certain performance measures for health service providers. It is also known as value-based purchasing, where medical personnel such as doctors, nurses, medical groups and others receive additional incentives after reaching a pre-defined target. The aim of introducing this model of payment into the healthcare system was to improve the overall quality of service provided by health personnel. Enhanced quality is a direct link to improved patient outcomes, and subsequently an increase in heath service quality on a larger scale. In the recent years, pay for performance has gained popularity in the health care industry, evidenced by the ways through which policies have been pushed to implement it on a permanent basis. It is popular in not only private but also public health providers such as Medicare and Medicaid (Medicare Hospital Compare, 2017).

            The background of this system emerged from issues related to health quality provided in many of the public health care institutions. In essence, many health care providers would be paid regarding how much work was done as opposed to the quality level of the work done. Additionally, pay for performance was necessitated as a means of controlling the manner in which patients are treated during their stay in hospital (Medicare Hospital Compare, 2017). It emerged that a significant proportion of patients suffered hospital-related injuries, a phenomenon related directly to health provider negligence. One of the steps taken to control it is the lack of provision of funds to treat hospital-related injuries. In essence, the hospital administrations would incur the cost of treating such injuries as opposed to insurance in the Medicare program. Additionally, the Affordable Care Act provides control on covering for patients who have too many readmissions, a factor considered to be caused by poor health services (Health Affairs, 2012).

            There exist certain measures of health service qualities, which are categorized into four primary measures. Foremost, process measures seek to evaluate operations of performance as well as factors that have been known to contribute to positive health outcomes. For instance, a process measure can involve an evaluation about how patients were counseled concerning drug and food intake as a measure of the health results obtained. Secondly, outcome measures focus on specific effects, which health services had on the patient ability to recover. Thirdly, the experiences of patients are regarded as a significant factor in evaluating service quality provided. In particular, this measure provides information about how the patient has viewed the quality of service provided during their entire stay (Medicare Hospital Compare, 2017). It may include factors such as communication, drug administration, and overall physical assistance in the event that they may be incapacitated. Fourthly, structure measures provide an in-depth evaluation of the physical attributes which facilitate high-quality service. These may be such as the facilities, personnel, medication types, software systems, and equipment, among several others.

There are different types of pay for performance systems including value-based purchasing, physician quality reporting, and Medicare Advantage plan bonuses. The value-based purchasing seeks to provide incentives for entire health facilities for high achievement in specific measures. Physician quality reporting focuses on individual incentives of physicians for reporting relevant and high-quality data to the Centers for Medicare and Medicaid Services (CMS) (Health Affairs, 2012). The Medicare Advantage plan bonus provides incentives to medicare advantage plans which have at least a four-star rating on a five-star scale. Further studies are being conducted to evaluate how to improve on incentive measures across all fields of health care.

References

Health Affairs. (2012). Health policy briefs. Robert Wood Johnson Foundation. Retrieved 02 Jan 2017 from http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=78

Medicare Hospital Compare. (2017). Linking quality to payment. N.p. Retrieved 02 Jan 2017 from https://www.medicare.gov/hospitalcompare/linking-quality-to-payment.html