Insurance company rewards to doctors and hospitals may not improve care

With increasing quality problems in the U.S. health care systems, many health insurers are turning to a new approach to get doctors and hospitals to do better: pay-for-performance.

In this approach, insurers offer financial rewards for better or more efficient care and sometimes create penalties for poor performance. Even though it has become commonplace, there is little evidence about its impact on care, says R. Adams Dudley, MD, MBA, a professor in the UCSF Institute for Health Policy Studies and the Department of Medicine.

He addresses this issue in an editorial in the October 12 issue of the Journal of the American Medical Association, outlining a strategy for learning more about the effect of paying doctors and hospitals to improve performance. The editorial is titled "Pay-for-Performance Research: How to Learn What Clinicians and Policy Makers Need to Know,"

Dudley emphasizes that health plans have adopted pay-for-performance on the grounds that financial rewards work in other industries.

He notes that offering bonuses to car salespeople for selling a certain number of cars can drive up a car dealership's volume and improve profits, but health care is more complex. For example, the one goal of car dealers is to sell cars, he says, while doctors and hospitals have many--sometimes competing--priorities. A cardiologist may want to make sure that prescriptions are written accurately and that the care plan is clearly communicated back to the primary care doctor, while still having time to spend with his or her patient.

Furthermore, Dudley says, some doctors' offices or hospitals might be more ready to respond to a reward than others, perhaps because they have pre-printed instructions for the patients. While paying these organizations would reward quality, it's not clear that it would increase quality in the system overall, since payments based on performance would go to the organizations that were already doing well, no

Contact: Stephanie Levin
University of California - San Francisco

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