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Purpose and rationale for pay-for-performance programs
- incentive programs designed to overcome limitation of current reimbursement systems by aligning financial rewards witn improved pt outcomes
- use clinical evidence to drive financial incentives
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Goals of pay for performance
- reduce clinical practice variation
- reduce errors
- reduce acute exacerbations
- increase transparency of provider performance
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How does provider buy in impact effectiveness of a reimbursement system?
providers will not participate if they do not believe it works
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how does bonus amount impact the effectiveness of the reimbursement system?
- bonus must be sufficient to cause provider to want to make changes or be able to make changes
- provider buy in
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How do performance measures impact effectiveness of reimbursement system?
- result in provider buy in
- measures need to be grounded in evidence
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Components that may change provider behavior to consider
- bonus distribution
- reward based on current performance, improvement or both?
- gradient sufficient to motivate all providers?
- do low performers have equal incentive?
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types of incentives
- bonuses
- withholds
- adjustable fee schedules - retroactive
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Reimbursement scoring designs
- threshold scoring
- scoring based on rank
- tiered scoring
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threshold scoring
scored based on meeting or exceeding a benchmark
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scoring based on rank
scored based upon rank among peers
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tiered scoring
- scored based on a combo of improvement and benchmarks across multiple domains
- absolute score and improvement over time
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Bonus incentive strategies
- relative rank
- relative rank with penalties
- target attainment
- target attainment plus improvement
- percentage recommended
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relative rank
based on performance rank compared to other providers
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relative rank with penalties
- bonus paid based on rank compared to other providers
- penalty paid if benchmark is not met
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target attainment
bonus to all that attain a target level of performance
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target attainment plus improvement
bonus paid as long as they have improved from previous and or met the target
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percentange recommended
- bonus paid based on percentage of patients receiving recommended care
- 1:1 match between care and bonus
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components that differ in effectiveness
- scoring method
- magnitude of bonus
- gradient of bonus distribution
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Relative rank advantages
gives top performers incentive to maintain high performance
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relative rank with penalties advantages
may provide increased incentive for the worst performers
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target attainment advantages
gives incentive to achieve and maintain performance at the target level (but not above)
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Target attainment with improvement advantages
- incentive to acheive and maintain target level
- direct incentive to improve performance
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percent recommendation advantages
inventive to do the right thing every time they see a pt
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relative rank disadvantages
low incentive for poor performers
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relative rank with penalties disadvantages
not beneficial for those with financial constraints
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steeper gradient
associated with improved care
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Relative rank score method, bonus magnitude and gradient
- score: based on rank
- magnitude: large for top performers, none for poor
- gradient: concentration toward top
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relative rank with penalties score, bonus and gradient
- score: rank & prior performance
- magnitude: large for top, penalty for poor
- gradient: penalty steepens gradient
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Target attainment score, magnitude & gradient
- score: based on threshold
- magnitude: 1/3 of relative rank
- gradient: more diffuse than relative rank
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target attainment score, magnitude & gradient
- score: threshold + prior performance
- magnitude: smaller than target attainment alone
- gradient: more diffuse than target attainment
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High performers prefer
relative rank +/- penalties
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Poor performers prefer
target attainment+/- improvement
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