Currently Viewing:
The American Journal of Managed Care February 2019
Impact of Hepatitis C Virus and Insurance Coverage on Mortality
Haley Bush, MSPH; James Paik, PhD; Pegah Golabi, MD; Leyla de Avila, BA; Carey Escheik, BS; and Zobair M. Younossi, MD, MPH
Does CMS’ Meaningful Measures Initiative Boil Down to Cost-Benefit Analysis?
Jackson Williams, JD
The Drug Price Iceberg: More Than Meets the Eye
A. Mark Fendrick, MD; and Darrell George, BA
From the Editorial Board: Sachin H. Jain, MD, MBA
Sachin H. Jain, MD, MBA
Value-Based Arrangements May Be More Prevalent Than Assumed
Nirosha Mahendraratnam, PhD; Corinna Sorenson, PhD, MHSA, MPH; Elizabeth Richardson, MSc; Gregory W. Daniel, PhD, MPH, RPh; Lisabeth Buelt, MPH; Kimberly Westrich, MA; Jingyuan Qian, MPP; Hilary Campbell, PharmD, JD; Mark McClellan, MD, PhD; and Robert W. Dubois, MD, PhD
Medication Adherence as a Measure of the Quality of Care Provided by Physicians
Seth A. Seabury, PhD; J. Samantha Dougherty, PhD; and Jeff Sullivan, MS
Why Aren’t More Employers Implementing Reference-Based Pricing Benefit Design?
Anna D. Sinaiko, PhD, MPP; Shehnaz Alidina, SD, MPH; and Ateev Mehrotra, MD, MPH
Does Comparing Cesarean Delivery Rates Influence Women’s Choice of Obstetric Hospital?
Rebecca A. Gourevitch, MS; Ateev Mehrotra, MD, MPH; Grace Galvin, MPH; Avery C. Plough, BA; and Neel T. Shah, MD, MPP
Currently Reading
Are Value-Based Incentives Driving Behavior Change to Improve Value?
Cheryl L. Damberg, PhD; Marissa Silverman, MSPH; Lane Burgette, PhD; Mary E. Vaiana, PhD; and M. Susan Ridgely, JD
Performance of the Adapted Diabetes Complications Severity Index Translated to ICD-10
Felix Sebastian Wicke, Dr Med; Anastasiya Glushan, BSc; Ingrid Schubert, Dr Rer Soc; Ingrid Köster, Dipl-Stat; Robert Lübeck, Dr Med; Marc Hammer, MPH; Martin Beyer, MSocSc; and Kateryna Karimova, MSc
Process Reengineering and Patient-Centered Approach Strengthen Efficiency in Specialized Care
Jesús Antonio Álvarez, PhD, MD; Rubén Francisco Flores, PhD; Jaime Álvarez Grau, PhD; and Jesús Matarranz, PhD

Are Value-Based Incentives Driving Behavior Change to Improve Value?

Cheryl L. Damberg, PhD; Marissa Silverman, MSPH; Lane Burgette, PhD; Mary E. Vaiana, PhD; and M. Susan Ridgely, JD
Value-based payment is promoting care delivery transformation among California physician organizations, although the initial focus has been on controlling hospital costs and redesigning primary care.
ABSTRACT

Objectives: To understand physician organization (PO) responses to financial incentives for quality and total cost of care among POs that were exposed to a statewide multipayer value-based payment (VBP) program, and to identify challenges that POs face in advancing the goals of VBP.

Study Design: Semistructured qualitative interviews and survey.

Methods: We drew a stratified random sample of 40 multispecialty California POs (25% of the POs that were eligible for incentives). In-person interviews were conducted with physician leaders and a survey was administered on actions being taken to reduce costs and redesign care and to discuss the challenges to improving value. We performed a thematic analysis of interview transcripts to identify common actions taken and challenges to reducing costs.

Results: VBP helps to promote care delivery transformation among POs, although efforts varied across organizations. Investments are occurring primarily in strategies to control hospital costs and redesign primary care, particularly for chronically ill patients; specialty care redesign is largely absent. Physician payment incentives for value remain small relative to total compensation, with continued emphasis on productivity. Challenges cited include the lack of a single enterprisewide electronic health records platform for information exchange, limited ability to influence specialists who were not exclusive to the organization, lack of payer cost and utilization data to manage costs, inability to recoup care redesign investments given the small size of VBP incentives, and lack of physician cost awareness.

Conclusions: Transformation could be advanced by strengthening financial incentives for value; engaging specialists in care redesign and delivering value; enhancing partnerships among POs, hospitals, and payers to align quality and cost actions; strengthening information exchange across providers; and applying other strategies to influence physician behavior.

Am J Manag Care. 2019;25(2):e26-e32
Takeaway Points

Value-based payment (VBP) is promoting care delivery transformation among California physician organizations (POs).
  • Investments are occurring primarily in strategies to control hospital costs and redesign primary care.
  • Few POs reported addressing specialty care redesign, practice variation, and low-value care, which are important cost drivers.
  • Advancing the goals of VBP further may require strengthening financial incentives for value; engaging specialists in care redesign and delivering value; enhancing partnerships among POs, hospitals, and payers to align quality and cost actions; strengthening information exchange across providers; and applying other strategies to influence physician behavior.
Policy makers and payers are implementing new provider payment models to incentivize improvements in value, and they are experimenting with different approaches to determine how best to design provider incentives to achieve desired effects.1-10 Applying incentives is intended to serve as a catalyst for change to close large gaps in quality performance.11 However, studies examining the association between pay-for-performance (P4P) incentives and quality improvement in ambulatory care have found mixed results and modest improvements.12-14 Despite many P4P interventions failing to show desired effects, little qualitative research has explored provider responses to incentives, whether they are making the changes needed to affect quality and costs, and factors that may explain why there has been small or no improvement in performance. The lack of evidence is notable given substantial investments in a new generation of payment initiatives that incentivize providers for both cost and quality.

Examining responses to value-based payment (VBP) can help determine whether programs are functioning as intended, motivating providers to redesign care delivery to improve value.15,16 Further, identifying challenges that providers are encountering could be used to refine VBP program design, increasing the prospect that value-based care transformations succeed. Our research objectives were to examine care delivery changes among physician organizations (POs) exposed to the California Integrated Healthcare Association (IHA)’s Value Based Pay for Performance (VBP4P) program, one of the nation’s largest VBP programs, and to identify challenges that POs are encountering in working to improve value. Examining California’s VBP experiment is important because California has served as a national bellwether for healthcare organization and delivery innovation, including fostering the development of health maintenance organizations (HMOs) and preferred provider organizations, creating quality and cost transparency tools for consumers, and pioneering the use of performance-based payments.6,17

METHODS

The IHA VBP4P Program

IHA implemented VBP4P starting in 2013, reconfiguring its quality-based P4P program, which began in 2003.6,18 VBP4P is composed of public reporting, public recognition awards, and value-based incentives.19 Using common measures, VBP4P aligns performance measurement across California’s 9 largest commercial HMO and point-of-service plans. These plans represent 180 multispecialty medical groups and independent practice associations (IPAs) (approximately 35,000 physicians), which care for 95% of California’s commercial HMO/point-of-service enrollees. The POs receive population-based payments under full or professional risk capitation arrangements, reflective of a category 4 payment model.20

POs earn shared savings based on quality, total cost of care (TCC), and resource utilization. To earn shared savings, a PO must (1) meet performance thresholds for quality and TCC trend and (2) reduce resource utilization over the prior year (Figure 1).21 For high-performing POs with little ability to demonstrate year-over-year improvement, IHA added attainment thresholds in 2016 for maintaining excellent resource management. The 2013 TCC trend was the consumer price index (CPI) plus 3% as the standard threshold and CPI plus 1% for high-cost POs. Earned savings are quality adjusted; quality multipliers range from 0.65 to 1.35, corresponding to a PO earning from 33.0% to 68.0% of generated savings. In 2015, plans paid $23.4 million in incentive payments (across plans, between $9 and $41 per member per month).

Quality measures included 25 clinical measures (Healthcare Effectiveness Data and Information Set), 6 patient experience measures (Clinician and Group Consumer Assessment of Healthcare Providers and Systems survey), and meaningful use of health information technology (IT).22 In 2014, IHA shifted from meeting CMS Meaningful Use standards to the ability to submit electronic clinical quality measures from the electronic health record (EHR) (ie, for blood pressure, screening for depression).

The TCC measure included average total annual payments to all providers who care for patients, including hospital, ambulatory, prescription drug, and ancillary services, and administrative payments and adjustments. Each PO’s TCC is computed and aggregated across plans to generate the average TCC per PO, adjusting for patient mix (using the concurrent DxCG Relative Risk Score [Sightlines DxCG Risk Solutions software, version 3.1.0 (Verscend Technologies; Waltham, Massachusetts)]) and geography (using the Medicare hospital wage index geographic adjustment factor).23,24

Resource utilization measures included inpatient bed days per 1000 member-years, all-cause readmissions, emergency department (ED) visits per 1000 member-years, outpatient procedures in preferred facility, and generic prescribing.

Sample Selection

We randomly sampled 40 POs from 156 POs eligible to earn shared savings in 2014 (with complete 2013 quality and TCC data), stratifying by geography to capture variation in market competition, capitation rates, and cost performance to examine a range of PO experiences. We hypothesized that differences in competition, capitation rates, and cost performance might affect PO responses to VBP4P. The 156 POs were stratified into 6 cost groups based on their absolute 2010 TCC level and 3-year TCC trend (2010-2012) prior to VBP implementation. We excluded 1 cost group (n = 8 POs) with unstable multiyear cost trend estimates (suggesting data completeness/quality issues) and very small POs (<5000 enrollees) with large year-to-year variation (n = 39 POs), leaving 108 POs for sampling.25

We sampled proportional to the number of POs in each cost group, with at least 3 POs from each of 5 regions. We replaced nonrespondents (n = 14) with POs from the same region and cost group; when no replacement was available, we drew a replacement from the same cost group, or, if no replacement was available from the same cost group, from the same region. The 40 sampled POs were not significantly different from the 108 POs eligible for sampling (Table). RAND’s Human Subjects Protection Committee approved the study.


 
Copyright AJMC 2006-2019 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
x
Welcome the the new and improved AJMC.com, the premier managed market network. Tell us about yourself so that we can serve you better.
Sign Up