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The Challenge of P4P

by John Moore | August 21, 2007

Big moves are under way to increase the quality of medical care delivered. Most often referred to as Pay for Performance (P4P), this initiative, which is being driven primarily by insurers and to a lesser extent employers, is meeting some stiff resistance from doctors and even some government agencies. The big issue: How does one actually measure quality of care?

Currently, insurers are relying on the “Claims” data they receive from care providers as part of the reimbursement request process. Insurers state that analysis of claims data, particularly whether or not certain standards of care and treatment were followed for a given medical condition, provides a reasonable measure of the quality of care provided.  The real problem, however, is that claims data does not have all the information regarding a given patient’s care and why the doctor may have deviated from standard best practices to deliver the best care for that given patient in that particular situation. Such information is typically found in doctor’s notes that are a part of a patient’s medical record.

If claims data is inadequate to assess the quality of care provided, why not just go to the medical records themselves to assess quality? Unfortunately, that information today is most often recorded on paper and placed in a patient’s file and it would be prohibitively expensive to extract such data manually.

To overcome doctors’ valid concerns regarding quality assessments on only claims data, P4P initiatives must concurrently support the adoption and use of  electronic medical records (EMR).  The digital record keeping of EMRs will provide insurers or other payors an ability to  semi-automate the “quality” assessment process and also provide the care giver greater assurance that the quality of care they provide receives a more complete review.

Unfortunately, the adoption and actual use of EMR software is still too low to be effective for P4P assessment activities and insurers are left with little alternative but to turn back to claims data.

But there may be a silver lining here.

If insurers benefit with a lower cost structure through P4P, maybe they should be footing a good part of the the bill to get doctors comfortable with and using EMR. Insurers could begin by subsidizing EMR purchase and deployment costs for providers. Likewise, if doctors perceive EMR as providing more accurate assessments of the quality of care they provide, they may be more willing to adopt and use the software.

Maybe the last cog is to get the EMR software vendors themselves to start working more closely with the care providers to insure that their software is helping them deliver quality care rather than being a hindrance to the delivery of such care. These vendors may also want to start positioning their software as software that will assist doctors in their own P4P initiatives.

Now that is a Win-Win!

One response to “The Challenge of P4P”

  1. If insurers benefit with a lower cost structure through P4P, maybe they should be footing a good part of the the bill to get doctors comfortable with and using EMR.

    That would probably negate their lower cost structure!

    One major problem with P4P in addition to data availability is in creating the algorithms that compute scores to measure “performance.”

    Assuming a cornucopia of good data, the “lies, damn lies, and then there’s statistics” issue is a challenge. You can skew analytics in your favor if you have a motivation to do so.

    I do not know how this is going to be resolved, considering there certainly are motivations on the part of many stakeholders to be “creative.”

    A very provocative resource describing possible motivations of the insurers, writtenby a physician, is at http://guthealthcare.com/understanding_it/pathway_1.html

    You can be sure the insurers would not agree with this site’s observations, but many physicians may.

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