Practice Management: Family doctor boosts earnings with pay-for-performance program

September 1, 2008

A growing number of physicians are starting to accept pay-for-performance (P4P) programs.

Solo family practitioner (FP) Ed Bujold of Granite Falls, N.C., is pleasant and soft spoken-the kind of a guy who doesn't mind being on the receiving end of a roast, as he was recently at a birthday party thrown for him by his staff. But nice guy though he is, Bujold had no problem registering his skepticism when, in 2006, Blue Cross Blue Shield of North Carolina (BCBSNC) asked him to participate in its new pay-for-performance (P4P) program.

"My sense was that the pay wasn't going to be enough to cover our start-up costs for the diabetes initiative we selected," says Bujold. Although he was forced to hire an outside consultant to collect and format the necessary data, his concerns ultimately proved groundless.

"After we'd completed the initiative, a representative from Blue Cross came into the office one day carrying a little balloon and a card with a check inside, which more than covered our start-up costs." Bujold earned a three-year National Commission on Quality Assurance (NCQA) certification, which entitled him to a similar amount from Blue Cross every six months until 2009. Then, he hopes to participate in a Blue Cross pay-for-performance initiative targeting heart and stroke care.

Such criticism is understandable, says internist Kevin B. Weiss, president and CEO of the American Board of Medical Specialties and a professor of medicine at the Feinberg School of Medicine at Northwestern University. "Pay for performance is brand new for most doctors, and it's coming upon them from outside the profession, and now even inside it." Still, Weiss thinks the tide will eventually sweep even doubters along. "Most physicians who participate eventually get to the point of acceptance, and a growing number are even starting to embrace P4P as a very reasonable way to guide them in caring for their patients."

In May, Weiss taught a two-day P4P course at the annual meeting of the American College of Physicians. The relative absence of hostility didn't surprise him, since it was a "self-selected" group, he says. What did surprise him, though, was the diversity of attendees-from CMOs of large multispecialty practices, through mid-size practice representatives, to solo physicians. "This trend is really affecting a broad array of doctors at this point, and not just the big groups," Weiss says.

In short, P4P doesn't seem to be going away anytime soon. And in some highly consolidated markets, where one or two health plans control the major share of the health insurance business, physicians may have limited choice about whether and with whom to participate. So whether you're a true believer, cautious participant, or hardened critic, here are some P4P essentials you'll need to know.

The P4P landscape

In simple terms, P4P is a system of quality incentives aimed at changing or enhancing physician performance.

On the private side, its primary drivers are "the big purchasers who want the health plans they contract with to do something to incentivize the right kind of care," Kevin Weiss says. Increasingly, these large purchasers are entering into direct P4P relationships with physicians through quality improvement programs like Bridges to Excellence and The Leapfrog Group. Many multispecialty groups are participating in P4P, as are hospitals that want to improve the performance of their salaried physicians.

On the public side, in 2006 Congress authorized the Centers for Medicare & Medicaid Services to improve provider quality reporting. Currently, doctors participating in the government's Physician Quality Reporting Initiative have the chance to boost their Medicare payments by 1.5%.