Do Pay-for-Performance Programs Improve Patient Outcomes?

January 12, 2017 - Value-based reimbursement models that pay for performance modestly incentivized providers to stick to clinical guidelines, but they may not be linked to better patient outcomes, a recent Annals of Internal Medicine study indicates.

The literature review of 69 studies from June 2007 to October 2016 revealed no significant connection between consistently better patient outcomes and pay-for-performance programs, especially in the US. The evidence pointed to the value-based reimbursement model’s ineffectiveness with improving patient outcomes, but researchers also suggested that other quality improvement interventions and a lack of “best” incentive structures may be the reasons for no clear evidence.

Out of the research in the review, researchers pointed out that pay-for-performance interventions across the world were not linked to better patient outcomes, including healthcare and utilization outcomes.

For example, two large before-and-after studies of the UK’s Quality and Outcomes Framework (QOF) reported no healthcare outcome improvements despite larger incentive payment opportunities. The framework was launched in 2004 and offers primary care providers incentive payments for achieving quality indicators. Value-based incentive payments can account for up to 30 percent of total provider income.

While one study found that better aggregate quality indicator and intermediate outcome performance was not connected to lower mortality rates, the other study reported that chronic obstructive pulmonary disease prevalence grew from 1.27 percent to 1.45 percent after QOF implementation.

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

“Although many studies found positive effects associated with P4P programs, the results were inconsistent across studies."

In terms of patient utilization outcomes, most studies, including six US ones, showed no clear evidence that the value-based reimbursement model lowered utilization rates. One US study that analyzed an intervention that provided bonuses to practices that earned advanced medical home status showed no impact on all-cause hospitalizations, all-cause emergency department (ED) visits, or ambulatory care–sensitive ED visits.

Other US studies revealed that three Medicaid programs did not lead to ED visit or inpatient utilization changes and a Medicare Advantage plan that rewarded providers for using evidence-based heart failure care did not change acute admissions or ED visits.

Hospital-based pay-for-performance programs shared similar results. For example, US-based research showed that the Hospital Value-Based Purchasing program did not result in significant mortality and targeted condition care improvements. The UK’s QOF experienced similar outcomes.

In terms of hospital-based patient utilization outcomes, researchers found that pay-for-performance programs were linked to initial hospital readmissions improvements. Medicare fee-for-service patients faced significantly less readmissions in the two years after Hospital Readmissions Reduction Program implementation. However, hospital readmission improvements slowed after two years.

READ MORE: What Is Value-Based Care, What It Means for Providers?

Despite limited patient outcome advancements, researchers did find some evidence that pay-for-performance interventions boosted process-of-care performance.

In the ambulatory setting, a US study reported that individual provider incentives resulted in more appropriate high blood pressure responses. But guideline-recommended antihypertensive medication use did not increase.

The QOF, however, showed more process-of-care performance enhancements. The literature review revealed significant improvements in long-acting reversible contraceptive prescribing and modest depressing screens and diagnoses improvements.

Thirteen other non-US studies also linked slight process-of-care advances to the value-based reimbursement model. For example, a Canadian intervention resulted in modest colorectal cancer screening improvements, but not for cervical and breast cancer screenings. Another before-and-after analysis also revealed slight advances for colorectal cancer screenings, mammograms, flu shots, and Papanicolaou smears.

However, hospital-based interventions were not connected to better process-of-care performance, according to eight studies from US and Canada.

READ MORE: Value-Based Reimbursement May Not Bring Benefits for SNF Care

Overall, the value-based reimbursement model was not strongly linked to significant healthcare outcome improvements in both ambulatory and hospital settings.

“Although many studies found positive effects associated with P4P [pay-for-performance] programs, the results were inconsistent across studies, the magnitude of effect was often small, and it was difficult to confidently ascribe observed changes in outcomes to the intervention itself because of the observational nature of most studies and their specific methodological flaws,” wrote study authors.

Researchers added that most of the positive study findings were from the UK, where provider incentives were greater than in most US programs.

“In healthcare, we have not found strong empirical data to help determine the most successful incentive structure.”

The value-based reimbursement model may not be the most appropriate mechanism for improving patient outcomes, according to the literature review. But researchers attributed the model’s ineffectiveness to other quality improvement program effects and inadequate incentive structures.

“First, especially in the era of modern health reform, P4P programs have been implemented and assessed in settings where other effective quality improvement interventions—such as public reporting, audit and feedback, and electronic decision-support tools—may have been deployed,” the study stated. “The incremental benefit of P4P may therefore have been more difficult to demonstrate.”

Additionally, the healthcare industry, especially in the US, may not have found the best payment mechanism to prompt change.

“Experts have suggested the importance of designing P4P programs using the principles of behavioral economics, in which such factors as payment size, timing, and frequency are believed to have important influences on individual behavior,” wrote study authors. “In healthcare, we have not found strong empirical data to help determine the most successful incentive structure.”

To improve pay-for-performance programs, researchers suggested that developers focus on increasing provider buy-in and aligning measures with organizational goals. Also, using measures that “were transparently developed from the evidence base and that were focused on improving clinical processes and patient outcomes rather than measures of efficiency were more likely to be effective.”

In addition, more effective interventions used a provider incentive structure that focused on the areas with the most opportunity for improvement. Program leaders should also continuously evaluate measure effectiveness and eliminate measures after sustained care advancements.