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Home / News & IndustryManaged Care Insight and Analysis
Updated: May 12, 2009
Survey Shows P4P Now A Mature Srategy

Once an experiment in healthcare, pay-for-performance (P4P) has proven itself an effective strategy for advancing quality and efficiency, according to a new survey released by Med-Vantage Inc.

Med-Vantage Inc. released initial findings from the fourth P4P survey it has conducted since 2004, co-sponsored by the Leapfrog Group and the Integrated Healthcare Association (IHA).

Participating health plans now report significant gains in achieving the program’s goals of improving quality, efficiency, and in encouraging the adoption of technology.

To date the results represent over 75 P4P sponsors of 94 programs for physicians and hospitals. The respondents comprise of health plans and coalitions, and in total represent over 150 million health plan members.

The survey results show:

  • Stable, Mature Processes. Most P4P programs are now more than 5-years-old and are funded as a regular part of their sponsors’ budgets rather than as experiments. Important issues that were once debated are now largely settled, such as the use of evidence-based measures from national sources and the involvement of providers in decisions that affect them.
  • Expanding Scope and Payment. P4P payments have grown to average over 7 percent of physicians’ total compensation and 4 percent of hospitals’ total compensation, with some physician P4P programs producing as much as 30 percent of physicians’ compensation. These levels ensure that performance is important to providers. A large majority of P4P programs expanded since 2006 to include more physician specialties and also to include more product lines. Most plan to continue expanding both the number of providers covered and the number of areas measured.
  • Major Improvements in Quality and Costs. In just two years since the last survey, the percentage of programs that report improvements in quality due to P4P almost doubled. Now more than half of P4P programs cite measureable increases in their providers’ clinical quality, the area that has been part of P4P the longest. Other areas with major jumps in P4P effectiveness were patient survey results, cost control and especially adoption of IT tools.

Tom Williams, executive director of IHA, said, "This data show that P4P has helped dispel the once strongly held belief that we could not measure quality in healthcare. We now see P4P being used in multiple settings to measure and improve the quality of care, cost efficiency and use of technology. All of healthcare today is under pressure to produce better value — better quality for the cost expended. P4P is helping build a culture of accountably, improvement and incentives to achieve this objective."

In addition to the P4P Survey, Med-Vantage is now completing a survey of "transparency" initiatives, to investigate how health plans and others give consumers information on providers’ quality and costs.

Addresses: Med-Vantage Inc., 111 Sutter St., 14 Flr., San Francisco, CA 94104; (415) 814-7100, The Leapfrog Group, c/o Academy Health, 1150 17th St. NW, Suite 600, Washington DC 20036; (202) 292-6713, Integrated Healthcare Association, 300 Lakeside Dr., Suite 1975, Oakland, CA 946612; (510) 209-1740,

  This article was taken from:
Pay-For-Performance Reporter

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