A new day dawning for pay for performance?

January 12th, 2015

A few days ago, the nation’s largest municipal healthcare organization – The New York City Health and Hospitals Corporation (HHC) – announced a major new pay-for-performance agreement with its physician affiliate groups. The agreement “will reward doctors with up to $59 million in incentive payments over the next three years for meeting the public hospitals system’s goals to improve patient care, efficiency, patient satisfaction and align with the new demands of healthcare reform,” according to a press release from HHC.

The organization, which includes eleven hospitals, a few skilled nursing facilities, and more than 70 community-based clinics. Bonus payments from the pay-for-performance agreement HHC announced will be divided between three physician groups over three years, if they meet these standards, according to the release:

• “improve care coordination in primary care centers and maintain HHC’s NCQA certification as a level 3 Patient-Center Medical Home under the stricter criteria that is now in effect for 2013;
• “improve patient satisfaction survey scores and specifically exceed the national average on two of the ten main measurements: the doctor-patient communication and communication about new medications;
• “reduce 30-day readmission rates from congestive heart failure and pneumonia;
• “maintain on-time start times for surgery to improve efficiency;
• “reduce the amount of time from triage to exit from the emergency room for patients who are admitted to the hospital;
• “reduce average length of stay in the hospital.”

Shortly before HHC announced the agreement, the New York Times weighed in with an article calling it a “bold experiment” – one that “represents a broad national push away from the traditional model of rewarding doctors for the volume of services they order…”

We’ll see. The most interesting part of the Times piece was the reaction of an official in Los Angeles County (which happens to have the second-biggest public health system after HHC). He said he was intrigued and that L.A. might consider doing something like it in the future. The article adds, “Administrators at several private New York hospitals said they were considering incorporating the federal benchmarks into their salary structures, but have not yet done so on a significant scale.”

So maybe, after many years of talk, pay for performance is finally due to have its day on a truly wide scale. I’m all for giving it a shot. I’ve long believed that nothing really changes in healthcare unless financial incentives change. What remains to be seen is whether this sort of “bold experiment” will pay off to the benefit of patient care.