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As a newly minted doctor in 1998, Gregory Deines, DO, knew little aboutbilling for services at Michigan Medical P.C., let alone excelling at"pay for performance."
"There's not a whole lot in medical education that teaches you aboutdealing with insurance companies, finances, or anything like that,"Deines says.
Now medical director of the Diabetes Center at Zeeland (Mich.) CommunityHospital, the internist is well versed in the incentive programs of PriorityHealth, a Grand Rapids, Mich.–based managed care organization with about3,500 physicians in its network.
Through its Physician Incentive Program, Priority Health augments itspayments to primary care providers by offering them financial incentives forcare improvements in asthma, diabetes, depression, immunizations, preventivehealth, and smoking cessation.
Priority Health lists a set of goals for each condition, Deines explains.The four targets for type 2 diabetes are glycated hemoglobin (A1C) 
7%, LDLcholesterol <100 mg/dl, and annual dilated retinal eye exams andmicro-albuminuria measurements to screen for diabetic retinopathy andnephropathy.
"They're able to pay physicians additional money for getting theirpatients to those targets, using a different point system for meeting eachtarget," Deines says. "For example, in order to receive any of thepotential funds, you need to get 60% of your diabetic patients to an A1C<7%. If you're able to do that, Priority Health will pay you $100 perdiabetic patient—even the ones who don't meet the target."
A GROWING MOVEMENT
The National Committee for Quality Assurance (NCQA) estimates there aremore than 80 pay-for-performance programs nationwide. In April, Blue Cross andBlue Shield of Michigan paid more than $1 million to 10 medical groups (withabout 2,900 physicians) in what could be the first installment of as much as$12 million in incentives. The money is distributed on the basis of how wellphysicians meet guidelines and goals.
Two years ago, Bridges to Excellence (BTE), a nonprofit coalition ofinsurers and large employers—such as Ford Motor Co., General Electric,Procter & Gamble, and UPS—created Diabetes Care Link and CardiacCare Link to recognize physicians who effectively and efficiently treatdiabetes and heart disease. Through Physician Office Link, BTE also rewardspractices for investing in clinical information technology to improve carequality.
For Diabetes Care Link, performance is measured using the DiabetesPhysician Recognition Program, co-sponsored by NCQA and the American DiabetesAssociation (ADA) ("Technology Helps Doctors Cross Quality Chasm,"see page 11).
"Doctors who earn recognition must show that they provide importantscreenings and work with patients with diabetes to control their bloodpressure, blood sugar, and lipid levels," says BTE board treasurerFrancois de Brantes, program leader for health care initiatives at GECorporate Health Care in Fairfield,Conn.
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As of June 1, de Brantes reports, close to 1,000 physicians had earned atotal of $1.7 million in rewards through BTE programs. About 250 participantsin Diabetes Care Link earned $400,000 of the rewards, with the balance ofpayments going to practices involved with Physician Office Link. No paymentshad yet been made for Cardiac Care Link.
Participating doctors may be eligible to earn up to $20,000 per year and$50,000 in total, de Brantes says. BTE coalition projects have beenestablished in Cincinnati, Louisville, Boston, and eastern New York, withothers cropping up in Illinois (two), Colorado, and Arkansas. UnitedHealthcarelicensed the model to use with employers in Omaha, St. Louis, Dayton, andsouth Florida. Cigna HealthCare did the same in Phoenix and NorthCarolina.
Earlier this year, Medicare launched its own 3-year demonstration projectthat has enlisted the participation of 10 physician groups, such as theMarshfield Clinic in Wisconsin and Forsyth Medical Group in Winston-Salem,N.C. In March, the Medicare Payment Advisory Commission (MedPAC) issued areport recommending that Medicare begin paying all physicians based on howthey perform. MedPAC suggests a system that withholds 2% of Medicare physicianpayments for a pool of funds that would be used to reward top performers.
MORE COST CUTTING?
The programs are not without skeptics, however, many of whom see pay forperformance as yet another form of cost containment with potentially harmful,if unintended, consequences. Some worry that these incentives don't take intoaccount that some doctors may care for sicker patients or that the programscould spur providers to weed noncompliant patients from their practice orneglect areas of care for which they are not rewarded.
A day after MedPAC presented its annual report to Congress, the AmericanMedical Association (AMA) unveiled a set of principles and guidelines forforming and implementing pay-for-performance programs. Programs must bevoluntary, focus on quality improvement, and use payment incentives, asopposed to penalties, AMA says.
Pay-for-performance initiatives "hold promise when they're trulyfocused on improving the quality of patient care," says AMA SecretaryJohn H. Armstrong, MD, chair of the task force that developed the guidelines."They risk peril when they only seek to reduce costs. The AmericanMedical Association is concerned that there has been a tendency for plans andemployers to use so-called pay-for-performance programs as a smokescreen forcost cutting."
He says some health plans have rewarded doctors who spent less money,without taking into account case complexity or disadvantaged patients. AMA andothers have taken issue with the UnitedHealth Performance plan, Armstrongsays, because they claim it cuts physicians from networks when they generatetoo many costs. UnitedHealthcare officials did not respond to inquiries bydeadline.
Proponents say the concept has merits beyond the savings: Doling outbonuses to those whose diabetic and cardiac patients fare better because ofgood preventive care makes sense. They say it's fair to reward providers whoinvest in computer systems to track their patients' exams, test results, andfollow-up visits.
"I think it's a good program," Deines says. "It helps toget people to their targets, and it helps physicians realize a benefitfinancially for doing that work. Now they are willing to pay for the timeyou've put in over the year to prevent further complications 10 or 15 yearsdown the road, maybe sooner." 
Footnotes
The American Medical Association (AMA) believes pay-for-performanceprograms must include the following principles:
Read AMA's complete pay-for-performance principles and guidelines online atwww.ama-assn.org/go/pfp.
Download the Medicare Payment Advisory Commission's "Report to theCongress: Medicare Payment Policy," March 2005, atwww.medpac.gov/publications/congressional_reports/mar05_toc.pdf.
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| DOC News | Diabetes | Diabetes Care | Clinical Diabetes | Diabetes Spectrum |
