California physicians given financial incentives to improve the quality of medical care have begun to “embrace an array of changes important to advancing quality,” according to a recent RAND Corporation study.
Measures adopted by medical groups include speeding up adoption of information technology (such as electronic medical records), tracking the improvement of physician performance and sharpening institutional focus on quality, according to findings published in the March/April edition of Health Affairs.
The project was supported by a grant from the California HealthCare Foundation.
"Physician groups are responding to pay-for-performance programs by making practice changes and altering how they compensate physicians to reward quality, but health plans and purchasers say that those investments are not yet translating into substantial gains in quality," said Cheryl Damberg, the study's lead author and a senior policy researcher at RAND, a nonprofit research organization.
Pay-for-performance programs in healthcare have grown rapidly in recent years as a way to improve the quality of care delivered by doctors, hospitals and other healthcare providers. Despite the rapid adoption of these programs, there is little research about how well they work and what types of strategies work best.
RAND researchers are evaluating a statewide pay-for-performance program launched in 2003 by the California Integrated Healthcare Association involving seven major health plans and 225 physician groups. The groups employ 35,000 physicians who care for 6.2 million people enrolled in commercial health maintenance organizations and point-of-service plans.
Under the program, physician groups receive financial bonuses if they meet certain performance guidelines, such as increasing the number of patients with diabetes who receive recommended blood tests. Other performance measures include improving the patient experience and adopting health information technology. Between 2003 and 2007, the participating health plans paid $203 million in incentives to participating physician groups.
Most of the medical groups surveyed suggested that the program's financial incentives – generally about $1,500 to $2,000 annually per physician – are too small to stimulate significant change. They suggested the incentives need to be two to five times larger to achieve quality improvements.
According to the study, health plans say increasing the incentives is a low priority because of the relatively small quality improvements attained and questions about whether other types of investments might produce greater quality gains.
Although there is some concern that pay-for-performance might cause physicians to drop patients who decline to follow recommendations, few reports of such events were received. More than two-thirds of the medical groups reported that the pay-for-performance program resulted in more positives than negatives.
"The true benefits of these programs may take more time to be realized and it is likely that investments in other quality efforts will be needed in addition to performance-based pay," Damberg said.