Practical Issues in the Design and Implementation of Pay-for-Quality Programs, Gary J. Young and Douglas A. Conrad
Health plans, healthcare purchasers, and provider organizations throughout the United States are crafting pay-for-performance programs with the intent of improving the quality of care and with recognition of the need to restrain rapidly rising costs. Health plans and large, self-insured employers have typically led the movement toward using quality scorecards with which to gauge hospital and physician performance, coupled with the use of financial incentives directed at hospitals, physician group practices, and individual physicians and practice teams.
In this article we provide a conceptual perspective for understanding the objectives and constraints of payers and providers as they wrestle with the next generation of pay-for-quality (P4Q) programs. We identify a set of practical issues that must be addressed in developing and conducting P4Q programs in different market environments. Those issues include specific strategies for choosing quality metrics, units of accountability, size of incentive, data and measurement systems, payout formulas, and collaboration among payers.
We illuminate these issues by considering different approaches in light of real-world P4Q demonstrations underway in the Rewarding Results program, in Bridges to Excellence program, and in specific provider organizations we interviewed over the years. The discussion of practical issues highlights principles and examples directly relevant to hospitals and physician organizations that are considering participation in P4Q as well as to those reexamining their physician compensation mechanisms.
A Comparative Performance Scorecard for Federally Funded Community Health Centers in North Carolina, Andrea Radford, George Pink, and Thomas Ricketts
To make informed management decisions, healthcare executives must have timely and useful information about the performance of their organizations. A review of the methods used by the Health Resources Services Administration’s Bureau of Primary Health Care to evaluate the performance of community health centers (CHCs) revealed a paucity of such information. This information gap motivated development of a comparative performance scorecard for the federally funded CHCs in North Carolina. The scorecard includes 19 indicators in four performance dimensions (access to care, financial performance, human resources, and utilization and productivity). A survey of participating CHC executive directors showed that the comparative performance scorecard is a useful tool for managing and evaluating the performance of CHCs.
Hospital Administration in the Early 1900s: Visions for the Future and the Reality of Daily Practice, Margarete Arndt and Barbara Bigelow
This article explores the first vision of modern hospital management as it was advanced by the American Hospital Association in the early 1900s and compares it with the reality of daily practice at the time. The findings show a wide gap between vision and reality. They also show that many of the issues faced by hospital administrators a hundred years ago remain relevant today. They include the tension between adoption of new technology and the cost of hospital care, advocacy for business practices from the private sector, and the administrator's responsibility in the area of quality of care.
The Performance Management System: Applying and Evaluating a Pay-for-Performance Initiative, Corey Helm, Courtney L. Holladay, and Frank R. Tortorella
The clinical operations and programs department at the University of Texas M. D. Anderson Cancer Center undertook an initiative, as part of a new performance management system, to determine the effectiveness in aligning individual performance goals to institutional goals and linking performance to rewards (i.e., distinguish high performers from low performers). The initiative was completed in two phases—the first involved a pilot group of administrators and managers, and the second encompassed the entire clinical area of the institution. Progress was monitored using a survey specific to the performance management initiative, an institutional employee opinion survey, and employee performance review and merit data.
We demonstrated support for both goals in the findings from our performance management survey and for our second goal with the institutional employee opinion survey results. Our correlation analysis of the linkage between performance and merit data provided further evidence that the initiative’s implementation affected our goal of better distinguishing high performers from low performers. Although our results indicate that we made significant progress toward meeting our goals, we outlined limitations and implications of our results for other organizations to consider as they embark on their own performance management initiatives. Thinking of performance management as a complete system that encompasses goal alignment, education, communication, and continuous feedback can lead to the recognition of top performers. This recognition is important as organizations try to retain their top talent and improve the performance of all employees in an effort to positively influence the patient experience.