Despite of the promise and growing popularity of P4P as a method to compensate physicians, our current understanding on specifics of how to design and implement the program in real practice settings is lacking. The present study addresses frequency of payment, which is a potentially important factor to consider in implementing P4P in a clinical setting. In our P4P experiment, where incentives were given to individual physicians for their performance on a variety of quality measures, however, we found no differential improvement in overall quality measure scores based on the frequency of payment.
The main limitation of our study is that the impact of quarterly payment cannot be isolated from the impact of quarterly reporting. An alternative study design to assess the impact of reporting concurrently would use a third arm that only received year-end reporting along with bonus payment, but it was considered unethical to withhold the quarterly reports as part of a trial. Although the quarterly report had been sent to the physicians for several years, practice directors reported to the investigators that physicians in both arms suddenly began raising questions regarding the quarterly report after the implementation of the physician-level incentive program. While the purpose of the quarterly report was to remind physicians about quality monitoring, it may have become more effective in conjunction with the bonus program. If true, that is, the “bonus” payment changed physician's response to quality reporting, that should be interpreted as an incremental effect of bonus payment. The question the present study sought to answer is whether the incremental effect differed by the frequency of payment, given other factors being equal, including continuation of the existing quarterly reporting.
Findings of our study should be interpreted within the context of the setting: physicians in this large medical group have been exposed for several years to reporting of the measures that were the focus of the bonus program. With information technology tools already in place, physicians in both study arms could easily identify their own eligible patients for each measure, not only to check the validity of the measures, but for which patients improvements might be necessary. They could also compare their performance with that of other physicians. The effect of frequency of payment might have been different in another setting.
The maximum bonus offered in this P4P program was roughly 2.5 percent of the average physician's annual pay, and the average bonus (U.S.$2,868) was 1.4 percent of the average physician's annual pay. The magnitude of bonuses used in other studies examining physician-specific P4P incentives for quality improvement varies widely. Larger bonuses seem to be more effective in changing physician's practice: a U.K. study showed significant improvement in measured quality with exceptionally generous bonuses (average of 35 percent of physician income; Doran et al. 2006
). Thus, one reason our study did not show any effect of frequency of payment may be because the achievable bonus amount was too small, regardless of the frequency of payment.
We did not formally analyze the costs of implementing quarterly versus annual bonuses. Because the P4P experiment was built on the existing performance evaluation and reporting system, incremental costs for the preparation of the bonus calculation were small. Quarterly reporting is clearly more expensive than annual, but the ongoing feedback is perceived to be valuable; the incremental cost of sending three additional checks per physician per year is small.
In conclusion, the frequency of payment itself, with no difference in the maximum bonus amount or in the frequency of reporting, may not substantially affect physicians' response to a P4P program. Future work should further investigate the effect of varying the frequency of reporting under the same financial incentive scheme, as well as and the effects of varying bonus amounts.