Physician incentives aim to improve performance
Health plan develops program for specialists
Horizon Blue Cross and Blue Shield of New Jersey is taking physician pay for performance to a new level, embarking on a plan to pay a higher standard fee to specialists who outperform their peers.
The new program, scheduled to go into effect in January, is the outgrowth of a series of incentive programs beginning in the mid-1990s, according to Nicholas Bonvicino, MD, MBA, senior medical director for clinical network management at the Newark-based health plan.
"Most of our reporting, profiling, and incentives had revolved around the primary care physician. We decided it was time to pay more attention to what specialists are doing and develop incentives or pay for performance for them," he says.
Horizon began developing the specialist incentive program two years ago, as the New Jersey marketplace shifted.
"We are moving away from selling managed care gatekeeper-type products. Most of our membership group has been in open-access products and PPOs. Most of the cost of care that is generated in the new health care environment comes from chronically ill patients and their care from specialists," Bonvicino says.
Employers and consumers are looking for and physicians are demanding public reporting of physician performance, but most of the physician performance quality measures have been directed at primary care physicians and most have dealt with the same five disease states: diabetes, hypertension, coronary artery disease, congestive heart failure, and asthma, he points out.
"It’s the same indicators over and over. Nobody looks at what specialists are doing. The indicators that have been developed work well for primary care physicians and some cardiologists, but they don’t tell you what you need to know if you are a patient and are trying to determine which surgeon or orthopedist or gastrointestinal specialist to choose," Bonvicino says.
Horizon Blue Cross Blue Shield of New Jersey began to develop its pay-for-performance program for specialists by creating balanced scorecards for all its major high-volume specialists, including primary care physicians, and looking at all the dimensions for physician performance.
When the health plan embarked upon its program to create performance profiles for specialists, the team found it a challenge to find well-written, evidence-based guidelines that could be used to measure how a physician provides care to his or her patients.
"Most guidelines are loose and allow a lot of room for interpretation. We wanted something that looks more like a protocol, and there are almost none outside of internal medicine and pediatrics," Bonvicino says.
The health plan developed its own way of profiling physician performance and created a physician scorecard that measures performance using three indicators: technical quality of care, cost efficiency, and pharmaceutical dispensing.
"We chose those three areas where we have the best data and the cost of data isn’t prohibitive. We’d like to measure member satisfaction but we have 16,000 physicians in our network, and to get statistically significant data would be cost-prohibitive," Bonvicino reports.
The plan chose indicators that it could measure from claims data and began building balanced performance reports.
The plan has created scorecards for cardiology, pulmonary medicine, orthopedics, obstetrics/gynecology, and gastroenterology. They are working on scorecards for internal medicine, pediatrics, and family practice and plan to look at urology, general surgery, and ear, nose, and throat specialists in the future.
"The goal is to be able to provide the doctors with a report on how they perform in comparison with their peers," Bonvicino explains. The health plan built quality metrics by looking at high-cost and high-volume disease within each specialty and doing a literature search for evidence-based guidelines.
"We have tried to develop quality measures that measure the physician’s ability to conform with the guidelines," he says.
For instance, if a patient has condition A and the guidelines say he needs X test, the plan tracks how many of a particular physician’s patients have had that particular test.
They look at postoperative adverse events among all patients who have had that particular type of surgery. For instance, with major orthopedic procedures, the plan tracks diagnoses that are indicative of an adverse event within 30 days of the surgery.
"In reality, we don’t really know by looking at the administrative data if every single one that happened was because of the procedure. We’re softer with that language," Bonvicino says.
The health plan risk-adjusted the data, using diagnostic cost groups so that doctors who take care of sicker patients aren’t unfairly compared to doctors who treat patients with less-intensive needs.
"We are working on our ability to look at measures, assign certain weights, and rank the physicians. We want to have some objective way of looking at who is best in the network," Bonvicino reports.
To measure cost efficiency, the plan uses episode treatment groups from Phoenix-based Symmetry Health Data Systems Inc. The software measures the actual cost of treating an episode of illness and provides a standard way of contrasting cost between a physician or hospital.
It includes the cost of a treatment facility, drug costs, and any other claim that comes with an episode of illness.
For instance, it compares the cost of treating ulcerative colitis by one physician in one hospital with the cost of the same disease treated by another physician in another hospital.
Goal is three-tiered fee schedule
The software tracks all inpatient and outpatient procedures, tallies all the claim costs, and creates an efficiency index by physician showing the average cost of care of patients treated by that physician and comparing it to the average cost in the network.
"By looking only at those episodes where the physician is deemed to be the one accountable for the treatment of an illness, we can compare and contrast the relative cost efficiency of one doctor with another who is taking care of the same disease process across the network," Bonvicino says.
The health plan’s goal in January 2006 is to have a three-tiered fee schedule based on ranking of physicians.
Under the plan, the physicians who are in the top tier receive a fee schedule that is higher than standard. Those in the third tier get fees that are a little less than standard.
"The people in the middle, whom we anticipate will be the majority of doctors, will get the standard fee schedule. There will be a significant number of doctors who don’t have enough events to statistically measure them. These will also wind up in the middle," Bonvicino says.
The three-tiered reimbursement model will pay physicians according to the quality of performance. Those whose quality is highest will get paid more for the same procedure.
Horizon Blue Cross Blue Shield plans to begin in January with some of the specialties and phase the rest in over the course of the year.
The health plan has begun sending out the scorecards as information only and telling the physicians that pay for performance is on the horizon.
In the past, the physicians have accepted the incentive plan well. Other than having to review reports and meet with health plan representatives, there is only an upside to the incentives, Bonvicino points out.
"This is a situation where there are going to be some winners and some losers. It may generate a lot of tension," he says.
The health plan began looking at primary care incentive programs in the mid-1990s, Bonvicino says.
"We had a great deal of interest in the role that the primary care physician plays in the managed care products. We designed a generic primary care incentive program," he says.
The program was designed for primary care groups that were large enough to manage their populations and rewarded them for population management rather than management of individual patients.
Horizon Blue Cross Blue Shield of New Jersey set thresholds of performance for various HEDIS-based quality measures and required that the physician group meet or exceed the thresholds.
"We used referrals to and involvement of their patients in our disease management programs and looked at satisfaction with the primary care physician by patient, voluntary disenrollment by the patients from the primary care physician, and the ability of the physician group to develop and implement in their practice evidence-based guidelines for care," Bonvicino says.
The primary care physicians receive a per-member per-month payment for meeting quality goals in addition to their regular reimbursement. The bonuses for performance are paid once a year.
"We have a cost management program, a gainsharing program in which we measure the cost of the group’s entire panel of patients on a per-member per-month basis throughout the year and look at how our network was performing. If the cost of the group’s panels is below the overall cost of the network, we share back a percentage with the physicians," Bonvicino reports.
The gainsharing program includes the entire cost of the panel of the patients regardless or whether the primary care physician delivered the service. For instance, if patients are referred to a specialist, the cost of their care still would count.
"The initiative is about the primary care physician’s ability to do care management. Ideally in a managed care world, the lowest provider is the least expensive and is capable of providing quality care," Bonvicino says. The physicians had to score well and pass the quality part of the program to receive any money at all.
"We had what we thought were sufficient checks and balances to avoid reimbursement for nondelivery of care. They had to hit the quality side. It doesn’t help them to put off delivering care," he adds.
The program was aimed at large primary care physician groups, most of which were capitated.
The health plan ultimately came up with a different model for pediatricians that looks at the kinds of services they provide in their office as opposed to managing the entire cost of care. Pediatricians received additional points for providing greater ranges of services and preventing emergency department avisits.
Horizon Blue Cross and Blue Shield of New Jersey is taking physician pay for performance to a new level, embarking on a plan to pay a higher standard fee to specialists who outperform their peers.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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