SGIM supports evidence-based, ethical, and comprehensive efforts to improve health-care quality and physician compensation. While carefully designed pay-for-performance systems could be a component of such an approach, current iterations fail to reach acceptable ethical standards for the reasons above. We therefore advocate the following four major strategies to achieve high quality health care and ethical performance-based physician compensation (Tables , , ).
Potential Ethical Problems in the Implementation of Pay-for-Performance
Major Strategies to Achieve High Quality Health Care and Ethical Performance-Based Physician Compensation
Recommended Safeguards to Protect Vulnerable Populations and Prevent Unintended Consequences Within Current Pay-for-Performance Systems
Current Pay-for-Performance Systems should Rapidly Adopt Safeguards to Protect Vulnerable Populations
Until researchers develop valid and comprehensive quality measures, pay-for-performance systems must prioritize the protection of vulnerable populations and minimize readily anticipated adverse consequences (Table ). Pay-for-performance leaders should institute the following safeguards to achieve these aims:
- Balance current population-level measurements with the best available measures of quality from the patient perspective. The non-patient-centered nature of current pay-for-performance systems could be partially remedied by appropriate measures. For example, the Consumer Assessment of Healthcare Providers54 places a strong emphasis on measuring how well health-care providers communicate with patients. A growing body of research55,56 could inform the development of valid measures in the outpatient setting.
- Reduce or stabilize the percentage of physicians’ salaries at stake. Policy makers should limit bonus amounts to reduce temptations to “game” the system, especially in arrangements that do not adjust for case mix. Current levels of approximately 5% of physicians’ salaries seem reasonable in systems that adjust for case mix, while lower levels would be appropriate for those that do not.
- Provide adequate off-setting compensation to physicians serving vulnerable patients. For example, the 2006 Massachusetts health-care reform legislation included provisions to base Medicaid hospital rate increases on quality improvement, including the reduction of health-care disparities.57 If such provisions are designed meticulously and fairly,58 financial incentives could encourage and reward physicians for serving patients with low levels of expendable income, complex medical conditions, non-adherence to recommended treatments, or limited health literacy.
- Recommendations regarding population-level measures. Pre-determined population-level measures of quality must be instituted carefully because they are inherently non-patient-centered. Because such measures are pervasive in modern pay-for-performance systems, we recommend several strategies to maximize the protection of vulnerable patients:
- Utilize population-level measures that are evidence-based and clearly linked to valued patient outcomes. For example, pneumonia and influenza immunizations have been proven to prevent potentially debilitating illnesses while having minimal adverse effects. Other commonly utilized measures may fail to reach these standards; hemoglobin A1C targets are based on evidence from randomized control trials, but the applicability to individual patients on real-life physician panels is often unclear.35,59
- Population-level measures should assess domains clearly within the influence of the physician or physician group, especially for complex patients. Basic process measures, such as vaccination rates and the frequency of diabetic eye exams, are imperfect measures of quality, but are more within the influence of physicians and practice groups than outcomes measures. Process measures seem less likely than outcomes measures to cause avoidance of vulnerable patients and physician frustration.
- Measures should assess quality at the level of large physician practices rather than individual physicians. Experts skilled in statistical analysis should determine minimum patient population sizes for each measure to provide optimal data and avoid statistical error. Only practice groups with sufficient numbers of patients should initially be measured.
- Measures should assess improvement toward goals in addition to achievement of cut-points. This could apply to both process and outcomes measures. For example, physician groups could be rewarded both for achieving vaccination rates at a pre-determined level as well as for annual improvements toward the target.
- Recommendations regarding population-level outcomes measures. Population-level outcomes measures are methodologically complex, and the validity of current measures is uncertain. This will likely preclude their use in an ethically defensible manner in the short-term unless provisions that maximize validity are closely followed, including:
- Explicitly assess patient complexity and vulnerability. This would require integrating patient survey data and medical record data regarding sociodemographic characteristics and medical comorbidities.
- Carefully adjust for case-mix based on relevant patient factors. For example, it would be inappropriate to reduce systolic blood pressure levels below 140 mmHg in an 85-year-old diabetic patient with multiple co-morbidities taking three antihypertensive medications. Proper case-mix adjustment might allow this patient’s physician to prioritize other care, while a lack of adjustment could induce either dangerous efforts to lower blood pressure or substantial physician frustration.
- Carefully adjust for the manner in which responsibility for patient outcomes is shared between physicians, patients, health plans, and other health-care institutions. For example, consider two physicians who must eventually prescribe three hypoglycemic medications to similar diabetic patients whose initial hemoglobin A1C levels were 9.5. The first patient has generous health insurance, enabling him to purchase all three medications and lower his hemoglobin A1C to 6.5. The second patient must pay the full cost of medications, and she can only afford two. She only lowers her hemoglobin A1C to 7.5. A proper system would adjust for health insurance status.
- Pay-for-performance leaders should initiate monitoring before and after implementing the above changes. Monitoring should assess important patient outcomes not often included in pay-for performance studies, such as satisfaction, access, continuity, and coordination of care. Effects on vulnerable patients should be a particularly important focus. Studies should also assess physician satisfaction and professionalism, administrative burden, effects on the patient-physician relationship, and the impact on disparities between physician practices serving more vulnerable and less vulnerable populations. Monitoring should examine payer satisfaction and value for health-care expenditures.
Key Stakeholders should Develop Consensus Regarding their Responsibilities in Improving Health Care Quality
A crucial first step in achieving ethically defensible health-care quality improvement will be for key stakeholders to develop consensus regarding their shared and unique obligations to individual patients and patient populations. For example, to improve blood glucose control among diabetic patients, physicians must recommend evidence-based, patient-centered management strategies, practice groups must provide access to testing facilities, health insurers must facilitate receipt of affordable medications and testing, and patients must adhere to therapeutic plans.
Bringing health insurers, patients, employers, and physicians to the table would highlight opportunities to improve coordination and continuity of care; new paradigms for quality improvement that integrate assessment at the individual physician level and institution level could emerge.
Researchers and Policy Makers should Develop Valid and Comprehensive Quality Measures for Use in the Next Generation of Compensation Systems that Reward Genuine Quality
A long-term strategy for quality improvement will be guided by a framework of accountability in which physicians, practice groups, health plans, and public payers are measured based on how well they fulfill well-defined obligations to individual patients and populations.
For example, measures of physician quality should assess multiple domains, such as accessibility, adherence to evidence-based but patient-centered care, and communication skills. Appropriate measures would account for individualized patient-physician goals, be based on the best available evidence, and minimize administrative burden and expense.
Measures of health-care institution quality (e.g., physician groups, hospitals, and public and private payers) should assess domains such as how well these groups foster teamwork, facilitate achievement of patient goals, strengthen the doctor-patient relationship, and improve access, coordination, and continuity of care for individual patients.
Equally important will be development of valid population-level
health-care quality measures. In addition to measuring how well physicians and health-care institutions fulfill obligations to individual patients, comprehensive quality measures would assess the degree to which patients, physicians, and health-care institutions maximize health-care resources available to the population, distribute them fairly,60
and fulfill their obligations justly.
Measures should be developed under strict principles of transparency. For example, all persons involved in creating new measures should, at minimum, be required to state potential conflicts of interest.
Researchers and Policy Makers Should Use a Cautious Evaluative Approach to Long-Term Development of Compensation Systems that Reward Quality
After developing evidence-based measures of physician, health-care institution, and population-level quality, policy makers should implement carefully planned, small-scale pilot programs that reward physician and health-care institution quality. Benefits and adverse effects should be monitored. Those entities implementing innovations in payment and quality improvement should take the lead in funding these studies.
Even with results from well-designed studies, judgments about the ethics of pay-for-performance will remain challenging. One approach might be to give preferential consideration to outcomes among vulnerable patients.
We base our suggestion to begin with pilot programs upon an ethical principle of precaution. However, efforts should be scaled up if benefits prove sufficient, health disparities are reduced and adverse outcomes are minimized.