The American Journal of Managed Care
January 2010
Volume 16
Issue 1

The Effect of a PPO Pay-for-Performance Program on Patients With Diabetes

A pay-for-performance program in a preferred provider organization setting may significantly increase the receipt of quality care and decrease hospitalization rates among patients with diabetes.


: To investigate the effectiveness of a pay-for-performance program (P4P) to increase the receipt of quality care and to decrease hospitalization rates among patients with diabetes mellitus.

Study Design

: Longitudinal study of patients with diabetes enrolled in a preferred provider organization (PPO) between January 1, 1999, and December 31, 2006.


: We used multivariate analyses to assess the effect of seeing P4P-participating physicians on the receipt of quality care (ie, glycosylated hemoglobin and low-density lipoprotein cholesterol testing) and on hospitalization rates, controlling for patient characteristics.


: Patients with diabetes who saw P4Pparticipating physicians were more likely to receive quality care than those who did not (odds ratio, 1.16; 95% confidence interval, 1.11-1.22; P <.001). Patients with diabetes who received quality care were less likely to be hospitalized than those who did not (incident rate ratio, 0.80; 95% confidence interval, 0.80-0.85; P <.001). During 1 year, there was no difference in hospitalization rates between patients with diabetes who saw P4P-participating physicians versus those who did not. However, patients with diabetes who saw P4P-participating physicians in 3 consecutive years were less likely to be hospitalized than those who did not (incident rate ratio, 0.75; 95% confidence interval, 0.61-0.93; P <.01).


: A P4P can significantly increase the receipt of quality care and decrease hospitalization rates among patients with diabetes in a PPO setting. Although it is possible that the differences observed between P4P-participating physicians and non—P4P-participating physicians were due to selection bias, we found no significant difference in the receipt of quality care between patients with diabetes who saw new P4P-participating physicians versus non–P4P-participating physicians during the baseline year. Further research should focus on defining the effect of P4Ps on intermediate outcomes such as glycosylated hemoglobin and low-density lipoprotein cholesterol levels.

(Am J Manag Care. 2010;16(1):e11-e19)

A pay-for-performance program in a preferred provider organization setting may significantly increase the receipt of quality care and decrease hospitalization rates among patients with diabetes.

  • Without concurrent quality improvement interventions such as diabetes disease management programs, a pay-for-performance program may increase quality-of-care processes but fail to improve outcomes.
  • Further research should focus on defining the effect of pay-for-performance programs on intermediate outcomes such as glycosylated hemoglobin and low-density lipoprotein cholesterol levels and on quantifying the additional benefits of quality improvement activities such as diabetes disease management programs.

Author Affiliations: From Health Benchmarks, Inc, IMS Health (JYC, HT, JCB), Woodland Hills, CA; Hawaii Medical Service Association (DTJ, KAH, RSC), Honolulu, HI; Office of Public Health Studies (DTJ), University of Hawaii, Manoa, HI; and the UCLA School of Public Health (APL), Woodland Hills, CA.

Funding Source: This study was supported by the Hawaii Medical Service Association, Honolulu, HI.

Author Disclosure: Dr Taira Juarez, Ms Hodges, and Dr Chung are employees of the Hawaii Medical Service Association, the health plan whose physician incentive program was analyzed in this study. The other authors (JYC, HT, JCB, APL) report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article. The Hawaii Medical Service Association reviewed the manuscript before submission for publication and contributed considerable information about the program and administrative data for analysis but had no influence on the study design, analysis, or results of the manuscript.

Authorship Information: Concept and design (JYC, HT, DTJ, KAH, RSC, APL); acquisition of data (RSC); analysis and interpretation of data (JYC, HT, DTJ, RSC); drafting of the manuscript (JYC, DTJ); critical revision of the manuscript for important intellectual content (JYC, DTJ, JCB, KAH); statistical analysis (JYC, HT, DTJ); obtaining funding (JYC, RSC); administrative, technical, or logistic support (JYC, KAH, JCB, APL); and supervision (JYC, KAH, JCB, RSC, APL).

Address correspondence to: Judy Ying Chen, MD, MSHS, Health Benchmarks, Inc, IMS Health, 21650 Oxnard St, Ste 550, Woodland Hills, CA 91367. E-mail:

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