Sustained Participation in a Pay-for-Value Program: Impact on High-Need Patients

Among Michigan primary care practices, sustained participation in a pay-for-value program appears to contribute to improved utilization outcomes for high-need patients.
Published Online: December 21, 2016
Dori A. Cross, BSPH; Genna R. Cohen, PhD; Christy Harris Lemak, PhD; and Julia Adler-Milstein, PhD

To assess whether multi-year engagement by primary care practices in a pay-for-value program was associated with improved care for high-need patients.

Study Design: Longitudinal cohort study of 17,443 patients with 2 or more conditions who were assigned to primary care providers (PCPs) within 1582 practices that did and did not continuously participate in Blue Cross Blue Shield of Michigan’s pay-for-value program (the Physician Group Incentive Program [PGIP]) between 2010 and 2013.

Methods: We used generalized linear mixed models, with patient-level random effects, to assess the relationship between whether practices continuously participated in PGIP and those practices’ cost, use, and quality outcomes (derived from claims data) over a 4-year period. For most outcomes, models estimated the odds of any cost and utilization, as well as the amount of cost and utilization contingent on having any.

Results: High-need patients whose PCPs continuously participated in PGIP had lower odds of 30- and 90-day readmissions (odds ratio [OR], 0.65 and 0.63, respectively; P <.01 for both) over time compared with patients with PCPs who did not continuously participate. They also appeared to have lower odds of any emergency department visits (OR, 0.88; P <.01) and receive higher overall quality (1.6% higher; P<.01), as well as medication management-specific quality (3.0% higher; P <.01). We observed no differences in overall medical–surgical cost.

Conclusions: Continuous PCP participation in a pay-for-value program was associated with lower use and improved quality over time, but not lower costs, for high-need patients. National policy efforts to engage PCPs in pay-for-value reimbursement is therefore likely to achieve some intended outcomes but may not be sufficient to deliver care that is of substantially higher value.

Am J Manag Care. 2017;23(2):e33-e40
Take-Away Points
  • As provider payment becomes increasingly tied to value, it is critical for payers and policy makers to understand what can be achieved by delivery and payment reform initiatives, as well as the conditions that lead to improved value.
  • To our knowledge, this is the first study to evaluate the effects of sustained participation in a primary care pay-for-value program on patient outcomes specifically for complex, high-need patients.
  • For high-need patients, sustained practice participation over 4 years was associated with fewer emergency department visits and readmissions, as well as improved quality, but not total cost.
  • Pay-for-value programs may need to emphasize and even incentivize sustained participation to give practices the time and resources to make changes in care delivery, but new approaches may be required to impact outcomes that are less fully under the control of primary care providers.
Comprehensive primary care has long been recognized as the cornerstone of a high-performance health system.1,2 In response to rising healthcare costs and inconsistent quality

performance, strengthening primary care is a critical part of the US health policy agenda. A specific target is to improve care for patients with the greatest healthcare needs: those with complex conditions, multiple chronic illnesses, and mental health disorders. Such high-need patients use a disproportionate share of health services and the nature of their care needs provides opportunities for increased efficiency, quality improvement, and associated cost savings.3

To promote new approaches to primary care that improve outcomes for high-need patients, an array of quality improvement initiatives have proliferated in recent years.4-6 Growing evidence indicates that these efforts can reduce medical expenditures and increase quality of care.7-10 However, the evidence is still emerging about what is required for these efforts to actually result in improved performance.6,11-16 The answer likely involves myriad factors, as substantial, multifaceted organizational changes are required to improve care for high-need patients.17,18 These changes—such as aligning intrinsic motivation with external performance incentives,19-21 creating an organizational culture of deliberate learning,22 and acquiring and deploying specific organizational resources required for targeted improvements—likely take time to become accepted and embedded. Thus, whether practices sustain their commitment to improved performance for high-need patients may be a critical piece to understanding variation in performance improvement under pay-for-value initiatives.

This paper builds on existing research and attempts to fill key knowledge gaps about the impact of primary care practices’ continued participation in a pay-for-value program. Prior work has had limited access to robust longitudinal data and/or significant sample sizes to assess practice performance over time,23 and the majority focus specifically on participation in patient-centered medical home (PCMH) demonstrations, rather than broader pay-for-value programs. Among the studies that do examine the effects of sustained program participation, findings are inconsistent. Friedberg et al examined a broad range of outcome metrics over a 3-year period in the context of a PCMH demonstration and found minimal change in quality with no significant effects on cost or utilization.11 Lemak et al analyzed a broader pay-for-value program, also over a 3-year period, and found positive effects on quality and on a subset of cost categories.24 However, neither paper assessed the impact on outcomes for complex, high-need patients. High-need patients represent an understudied group that is particularly critical to study, given that they are likely to disproportionately benefit from improved care delivery, but may not benefit equally under performance improvement programs.25,26

To help better understand the impact of sustained participation in care delivery transformation efforts for high-need patients, we sought to answer the following specific research question: Is continuous participation in a fee-for-value physician incentive program associated with improved primary care practice cost and quality outcomes for high-need patients? The passage of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) of 2015—which aims to increasingly tie provider compensation to value of services delivered—creates particular urgency to better understand the specific context(s) under which existing pay-for-value programs positively impact patient care. We answered our research question in the context of a statewide, multi-pronged performance improvement program, which has been studied previously.24,27 We examined a range of cost, use, and quality outcomes for a panel of 1582 primary care practices that did and did not continuously participate in this pay-for-value program in order to assess various dimensions of performance. Our results inform ongoing efforts to use incentive programs to promote the evolution of primary care practices in ways that better meet the needs of high-need patients, and thereby improve overall health system performance.


Setting and Data

In 2005, Blue Cross Blue Shield of Michigan (BCBSM) created the Physician Group Incentive Program (PGIP), a pay-for-performance program developed in collaboration with Michigan physicians and physician organizations (eAppendix Figure [eAppendices available at]). Multiple programs fall within the PGIP umbrella, the largest of which is the PCMH program. The other programs—care management resources and billing codes, as well as quality-based reimbursement—provide additional resources and incentives to improve care while reinforcing practices’ PCMH transformation. Of all practices participating in PGIP, the majority (75%) are designated as PCMHs. BCBSM issues yearly designations to practices with significant progress and strong performance on PCMH capability measures. Since 2009, the number of physicians in PCMH-designated practices (4000 physicians in nearly 1500 practices) has tripled; BCBSM also supports non-PGIP practices interested in adopting PCMH capabilities.

We focused on the most recent 4 years for which program data were available (2010-2013) to balance our need to capture a sufficiently long period that reflected sustained participation—a period in which there was a large number of practices that met the sustained participation cutoff, and a relatively recent period in which current key national health policy efforts (ie, the Health Information Technology for Economic and Clinical Health Act and the Affordable Care Act) were underway.

Our target patient population were BCBSM members who: a) had 2 or more chronic medical conditions, including conditions included in the Charlson Comorbidity Index and 6 additional mental/behavioral health conditions shown to be significant drivers of cost and complexity (Table 1); and b) were continuously assigned to the same primary care provider (PCP) in the same practice location for the duration of the study period. Annual patient-level data were made available by BCBSM for analysis. Patient data included annual claims-derived outcome measures of interest (described in the following section); patient demographics (age, gender, and primary health conditions); and patient’s assigned PCP. BCBSM provided supplementary data that included PCP demographics, practice identifiers (that allowed us to group PCPs and their associated patients within practices), and the duration of practices’ participation in PGIP. The final analytic data set contained 69,772 patient-year observations (4 years for 17,443 unique patients) nested within 1582 practices in the state of Michigan.


Outcome Measures

Practice performance was evaluated using cost, use, and quality measures. We examined total allowed medical–surgical cost per member per year in addition to the 3 subcomponents of medical–surgical spending: inpatient, outpatient, and emergency department (ED) costs. We also examined total allowed drug cost per member per year. Six measures of use were included: numbers of inpatient admissions, ED visits, 30- and 90-day readmissions, PCP visits, and specialist visits.

We measured quality using an overall composite score composed of 21 individual measures that captured adherence to evidence-based practices. A list of these measures is included in eAppendix Table 1. We also examined a 6-measure medication management subcomposite to specifically examine the effect of program participation on appropriate use of medications for patient care. The individual measures used to construct these composites were selected from the Healthcare Effectiveness Data and Information Set, as well as from internal BCBSM-defined metrics, described in detail elsewhere.24,28,29 Consistent with past work, we used composite measures rather than individual measures because of concerns about sufficient numbers of patients for any individual measure and heterogeneity in performance across individual measures.30,31

PGIP Participation

We used BCBSM PGIP program data to identify practices that continuously participated in PGIP during our study period (n = 1401 practices) and those that did not (n = 181 practices).

Practice- and Patient-Level Characteristics

We created a set of practice- and patient-level demographic measures to control for other factors likely to influence both PGIP participation and patient outcomes across different types of practices. Practice-level characteristics included average PCP age, average panel size (of BCBSM patients) among PCPs in the practice, and 2 measures of organizational size: number of PCPs in the practice and the proportion of high-need patients in the practice’s panel (based on BCBSM-assigned patients).32-34 At the patient level, we included age and gender.


Analytic Approach

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