Seminar looks at physician ‘pay for performance’ issue

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(Host) The idea of linking physician pay to the quality of care they provide is taking hold in Vermont.

But just how this “pay for performance” system will ultimately work is still unclear. A seminar today showed that several different methods are evolving, and that many questions remain.

VPR’s John Dillon was there.

(Dillon) There is yet no consensus between those who provide health care and those who pay for it on how to improve performance.

Helen Riehle directs the Vermont Program for Quality in Health Care. The non-profit group has tried to come up with measurement standards for a pay for performance system. Riehle says payers and providers failed to reach agreement in key areas. Physicians wanted standards to be voluntary in the first phase. But

(Riehle) “The commercial payers on the other hand, some of them had designs already in place, that had the component of a mandatory system. So they weren’t able to say they could support this.”

(Dillon) The state’s major insurance providers, MVP, Cigna and Blue Cross-Blue Shield – each have designed different models to link pay and performance.

Business groups would like to see provider pay closely linked to job performance. They argue that physicians who do a better job in treating chronic diseases, for example, should be rewarded, while those whose patients have worse outcomes, should get paid less.

Jeanne Keller is a health policy analyst who has worked with employer groups.

(Keller) “The major barrier to a standardized pay for performance system is not really the measurement – what are the things we should be looking at to reward. It’s whether we simultaneously reward and punish or do we only reward? And where does the money come from to pay the rewards?”

(Dillon) Keller says one way to keep health costs under control is to have a payment system that is revenue neutral.

(Keller) “And that means if you’re going to pay bonuses to people at the top, it’s funded by taking money back from people on the bottom. And the provider community is pushing back very hard on that.”

(Dillon) Paul Harrington directs the state’s Medical Society, which represents Vermont physicians. He’s concerned that a pay for performance system could squeeze practices that are already facing reduced payments from the federal and state government. He says many physicians can’t afford the computer systems required to track the new performance measures.

(Harrington) “So I think this is on the horizon. But we need to make sure that in instituting more mandates on physicians we don’t drive them out of business, because we can’t afford to lose those practices in the rural part of the state that are just hanging on by a thread.”

(Dillon) Harrington says the federal government is working on its own pay for performance system. He’s headed to Washington later this week to meet with Medicare officials working on the plan.

For Vermont Public Radio, I’m John Dillon in Colchester.

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