Assume the Position!: Major Medical Society Statements on Pay for Performance

MDNG PediatricsMarch 2007
Volume 5
Issue 4

As healthcare costs continue to soar out of control, the push to contain costs by tying physician reimbursement to patient outcomes ... is gaining momentum.

As healthcare costs continue to soar out of control, the push to contain costs by tying physician reimbursement to patient outcomes that conform with pre-determined quality indicators is gaining momentum, with the Centers for Medicare and Medicaid Services and other federal programs leading the way. Many professional medical societies are at least nominally supportive of the concept of pay-fo-rperformance (P4P), with many crafting official position statements in the past year or two that outline goals for programs that measure physician quality. Many of these documents also express concerns over the validity of some measurements, the need to provide incentives for physicians to invest in the information technology and other tools that will be necessary for participation, and other necessary components and provisions of these programs. This feature provides a snapshot of the current dialog about P4P, with links to reports, articles, and other online resources that present a variety of perspectives and opinions.


Document online. Although supportive of the general concept, the Society’s statement notes that "A pay-for-performance infrastructure is contingent upon the development of evidence-based performance measures--a task that has proven challenging. To date, several groups are working to develop and test measures for implementation. However, it is difficult to develop standardized measures across medical specialties. In addition, developed measures must be tested, which can be tedious, time-consuming, and expensive. A proper infrastructure is critical to ensure appropriate and systematic collection of data from practices, as well as protect patient privacy." Like many groups, the Society is leery of ceding too much decision-making authority to the dictates of "best practices," noting that "variations must be allowed to meet the unique needs of an individual patient based on the physician's clinical judgment." The Society also has specific concerns related to linking P4P to changes in the physician payment system, especially where Medicare is concerned--the Society comes right out and claims that "any P4P program will not work under the current sustainable growth rate (SGR) payment formula. The two are inconsistent methodologies, and the Society believes that the SGR must be repealed if P4P is to be successfully implemented." The Society is also concerned that "data collection requirements intrinsic to P4P programs should not place financial or administrative burdens on providers." The ability of small practices to comply with P4P reporting requirements, as well as the ability of practices that care for underserved patient populations and practices that do not possess sufficient hardware and other technology resources, must also be taken into consideration.

For Your Consideration The Endocrine Society P4P position statement raises the issue of how to account for treatment outcomes in the current health-team approach to care. Given the overlap in care provided across specialties, how can P4P programs incorporate outcomes that rely on multidisciplinary approaches while holding each individual provider accountable for his or her performance?

E-mail your thoughts on this matter to

AMERICAN COLLEGE OF CARDIOLOGY Document online. "However." That word inevitably comes up before too long in just about everything we read about P4P. And the ACC's position statement is no exception. The American College of Cardiology Foundation, we are told, "recognizes the importance of, and supports the concept of, paying for performance to inspire greater focus on improving care delivery systems. However, physician pay-for-performance programs should be designed to support and facilitate the quality improvement process and strengthen the patient - physician relationship, not just reporting performance and outcomes." The ACC goes on to outline 12 important principles that should guide P4P program development, including the usual suspects of providing "adequate incentives for investments in structure, best practices and tools," determining performance targets through a "national consensus processes" that addresses a variety of factors, ensuring programs "emphasize success and reward achievement," and that provider rating methods should be transparent.

One interesting note: the ACC makes it a point to express its support for programs that "favor the use of clinical data over claims-based data," in contrast to the contention made by some CMS officials that risk-adjusted claims and billing data tracks closely with clinical data. More on this subject.

For Your Consideration

The ACC, as do many other professional organizations, holds the more-or-less unassailable position that "physician pay-for performance programs should be built on evidence-based, well-established, and proven performance measures." However, given the rather fierce ongoing debate over whether we can safely at present use any of those three descriptors when talking about P4P, are we putting the cart before the horse a bit, leaving no alternative but to preface P4P pronouncements with normative statements similar to the quote from the ACC?

Send your thoughts to


Document online. "The ACP views pay-for-performance (P4P) programs that focus on quality as a tremendous opportunity to align incentives in a way that rewards internists for eff ective care. However, ensuring that a P4P program is designed the right way is a challenging task. As new systems of payment linked to performance are being explored, ACP must ensure that the right measures are used; that data collection is accurate and reasonable; that appropriate and adequate financial incentives are provided; that quality--not just cost reduction--is always the overriding measure of success; and that savings realized by improvements in care are proportionally shared with those responsible for providing the care, which results in the savings."


Document online. More so than any other specialty society, the AGS is concerned with how Medicare-specific P4P measures will be implemented (for obvious reasons) and also with how these programs will apply to the care of patients with multiple chronic conditions, noting that "a value-based purchasing system for the Medicare system must address the care of the large portion of Medicare beneficiaries who have multiple chronic conditions, are frail, of advanced age, or require palliative care and not focus only on the care provided to the typical beneficiary." The AGS echoes the concerns regarding unintended consequences raised by other groups when it states "it is essential that a pay for performance program not unwittingly lead to a decrease in quality for vulnerable elders or those who may have different clinical care goals. Assessing and rewarding performance using indicators that have been developed for a commercially insured population and may not be relevant to vulnerable older adults has the potential to detract attention away from essential care and services."

For Your Consideration

As each medical society weighs in with its concerns and questions regarding how P4P applies to the patients and conditions that fall under the society's medical specialty, the question arises as to how to devise quality indicators that take into account the needs of a heterogeneous patient population. To what extent are specialty-specific or even disease-specific standards and indicators necessary, and how will we account for the diffi culties of managing patients with atypical disease presentations and/or multiple conditions?

E-mail to share your thoughts, especially if you have been involved with any of the various work groups or committees tasked with devising these benchmarks.

Untested Methodologies The descriptions "untested," "unproven," "yet-to-be-validated" and similar constructions pop up again and again in the ongoing discussion about pay-for-performance. One of the basic tenets of statistical measurement is that you have to defi ne what exactly you're trying to measure and then ensure that whatever metrics you decide upon actually measure what they're supposed to measure. With so much ongoing debate over the definition of terms such as "quality," and despite several ongoing and successful (in quite a few cases, though that probably depends on one's point of view) P4P pilot programs and initiatives, we're getting the impression that a sizeable percentage of the physician community remains skeptical that meaningful P4P is even possible at this point. We'd like to get some more information from providers who have first-hand experience with P4P.

If you'd like to help us out, send an e-mail to


Document online. Statement of purpose: "The Academy recognizes the need for experimentation in physician payment methodology, including pay for performance as one approach. However, there are a multitude of organizational, technical, legal and ethical challenges to designing and implementing pay for performance programs. The Academy also recognizes that there are both advantages (increased reimbursement, improved effi ciency and quality) and disadvantages (cost of acquiring information technology, multiple programs and guidelines, data collection) to such programs as they are currently envisioned and being tested by various employers and their contracting health plans and third party administrators." Performance Measures Criteria and more from the AAFP.

Medicine Is Going to the Blogs! In July 2006, the proprietor of one of our favorite healthcare blogs (Kevin, M.D.) asked "Is pay-for-performance leading to antibiotic overuse?" citing a study that looked at how an externally mandated treatment standard (in this case, the administration of antibiotics within four hours of arrival at the hospital in all patients with suspected pneumonia) may be adversely distorting treatment outcomes. This is what can happen, wrote the blogger "when you use a blunt instrument, like global performance measures, to improve quality." As with any blog worth its salt, the real action is to be found in the comments to each post. This case is no exception; favorite quote from commenter: "If there was a cut and dried practice to medicine, don't you think computer programs would already be implemented in the emergency rooms to help triage patients?"

Another of our favorite blogs, DB's Medical Rants (written by Dr. Robert Centor), has featured many thoughtful and eloquent posts on the subject of P4P. Recurring themes include the unfortunate (but unavoidable) reality that measuring physicians using performance measures will often lead to what economists call "perverse incentives;" the difficulty of reconciling the individualized needs of unique patients with broad-based quality measurements; and the folly of attempting to base compensation entirely on a single, disputed, nebulous concept ("quality"). Favorite quote: "Medical care is not a symphony, it is jazz. Each performance is unique; each patient is unique; each set of treatment decisions must be unique." Second favorite quote: any response to frequent commenter "CJD," attorney-at-law.

P4P Reports Rewarding Provider Performance: Aligning Incentives in Medicare

This September 2006 report is from the Institute of Medicine Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Programs. Read the whole thing for free online.

Paying for Performance: A Call for Quality Health Care

An excellent report that explores the rationale for P4P programs and provides an overview of current efforts in this area. The section on future predictions for P4P makes for especially interesting reading.

Advancing Quality Through Collaboration: The California Pay for Performance Program

This 2006 report examines the five-year history of one of the largest and most prominent pay-for-performance programs in the country. There are several additional healthcare blogs that have provided interesting takes and commentary on this subject and that definitely are worth regular visits, including Retired Doc's Thoughts, MedPundit, and Notes from Dr. RW.

What Does the AMA Have to Say About All This? A press release updated in January 2007 quoted then-AMA Secretary John H. Armstrong, MD, on the subject of P4P. Dr. Armstrong stated that "Pay-for-performance programs may serve as a positive force in the health care industry if the programs are designed primarily to improve the effectiveness and safety of patient care. Fair and ethical pay-for-performance programs are patient-centered and assess physician performance with evidence-based measures."

What are the hallmarks of a quality P4P initiative? The AMA believes such a program should conform to five key principles:

  • Ensure quality of care
  • Foster the relationship between patient and physician
  • Offer voluntary physician participation
  • Use accurate data and fair reporting
  • Provide fair and equitable program incentives.

More info on the AMA Physician Consortium for Performance Improvement.

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