Using Incentives to Improve Quality in Health Care: Key Concepts and Review of the Literature

1
Using Incentives to Improve Quality in Health
Care Key Concepts and Review of the Literature

• R. Adams Dudley, MD, MBA, Jason Talavera, Harold
  S. Luft, PhD
• University of California, San Francisco
• Anne Frolich, MD
• Bispebjerg Hospital, University of Copenhagen
• Peter Broadhead
• Australian Dept of Health and Ageing
• Support Agency for Healthcare Research and
  Quality, Commonwealth Fund

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Conceptual Considerations Characteristics of
the Incentive

• Magnitude of a financial incentive
• Reputational effects from public reporting
• Costs of complying

3
Conceptual Considerations Factors External to
the Incentive

• Business environment (e.g., FFS vs. capitation,
  alternative incentive programs)
• Specific characteristics of the provider (e.g.,
  years since training, work load before the
  incentive)
• Organizational characteristics of the providers
  group (e.g., information technology available)
• Patient factors (e.g., education level,
  willingness to take on self-care)

4
Model of An Individual Providers Response to
Incentives
Intervention Component
Recipient of Incentive
Predisposing Factors
Incentive Revenue Potential Direct and
Opportunity Costs of Complying Non-financial
Characteristics
Provider Group (if applicable)
General Financial Environment Other Incentives
Provider Characteristics
Market Characteristics
Providers Need to respond to the incentive
Enabling Factors
Organizations capabilities and goals
Patient factors
Provider response change in care structure or
process

• Outcomes--change in
• Clinical performance measures
• Non-financial outcomes for the provider (e.g.,
  provider satisfaction)
• Financial results for the provider

5
The Literature On Value-Based Purchasing (VBP)
What is Known?

• Only 9 randomized trials of incentives to improve
  quality
• Two general findings
• - Providers respond appropriately to financial
  incentives
• - Providers respond appropriately to public
  release of performance data

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The Literature On VBP Incentives Can Work

• In some circumstances, providers respond to
  financial incentives
• Paid residents their salary plus 2/visit
  scheduled vs. 20/month for attending clinic
• FFS-incentivized residents did better complying
  with well-child care recommendations and
  continuityfor 2!
• Reference Hickson et al. Pediatrics
  198780(3)344

7
Public Reporting of Quality Measurements Impact
on hospitals with poor scores
(p lt .001, N34) Reference Hibbard et al.
Health Affairs 200322(4)84
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The Literature On VBP Results by Topic

• Uncertainty about the chance of success may
  matter
• FFS 4 positive studies, one negative
• Bonus for hitting a compliance rate target
• two positive, three negative
• two negative were for a 10-20 chance of getting
  a bonus if performance better than other groups

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The Literature On VBP What is still unknown?

• How big do incentives need to be?
• Does it matter if youre adding incentives to a
  fee-for-service or a capitated system?
• Should they focus on individual providers or
  groups?
• Should there be incentives to adopt enabling
  technologies (e.g., information systems)?
• Does using incentives save purchasers money?