Academy, FPs Help Shape Future of P4P

"Pay-for-performance is an incentive to prove the quality of care we already provide and to improve our care," AAFP President Mary Frank, M.D., tells family physicians asking about P4P. "Think of it first as quality improvement and then as positive financial recognition."

In other words, QI plus a better bottom line.

"Most family physicians, including me, operate small businesses on a small margin, and getting financial incentives for providing good care is a way to improve our bottom line," says Frank. See "Here Are Answers to Pay-for-Performance Questions" for a definition of P4P.

Ron Bangasser, M.D., past president of the California Medical Association and an FP in Redlands, Calif., speaks to groups all over the country about pay-for-performance. His message: P4P is not going away. "It's here, it's going to stay, and it's going to change the way we practice," says Bangasser.

He estimates that between 100 and 120 P4P programs -- overseen by the federal government or private insurers -- currently operate across the country. A case in point is Integrated Healthcare Association, a nonprofit, California-based entity, which has a P4P program that will pay out a total of $88 million to 235 California medical groups, including Bangasser's, in 2005.

"There are tens of millions of patients covered under these programs now, and soon there are going to be hundreds of millions," says Bangasser, chair of the IHA Pay-for-Performance Technical Committee and a member of the National Committee for Quality Assurance's Committee on Performance Measurement.

What has been the impact of P4P programs on California consumers? According to Bangasser, a comparison of data between 2002 and 2003 revealed that

"It's not the amount of money so much as good measures and a little bit of money," says Bangasser. "If I don't believe the measures are worth it, I ain't gonna play. And the pay-outs have to be from new money. It can't be money taken away from all of us or some of us as a stick, it has to be all carrot.

"Right now, the more you do, the more you get paid. The more you do poorly, the more you get paid. We're trying to make a small change in that perverse system by adding a maximum of 10 percent of a physician's income for P4P to improve quality."

AAFP's P4P policy also insists on new money. "P4P incentive programs should utilize new money funded by using a portion of the projected health plan savings. There should be no reduction in existing fees paid to physicians as a result of implementing a P4P program."

In discussions with family physicians, Frank uses the IHA program as an example of a positive P4P program that began with a small group of performance standards and built up to others. "You get a reward as long as there's incremental improvement," says Frank. "You don't have to go from 1 to 100" before getting financial recognition for providing good care. "By the time you get to complex standards, most practices have the technology to help them meet the standards," she adds.

Part of why the IHA program works for family physicians is that FPs helped put the program together, says Frank. "We need to be involved in discussions with employers or regional insurers about P4P. Lots of times, the family doctor is the reality test."

What are family physicians saying about P4P? "Some of our members aren't clued in that it's coming, even though it's already here," says Frank. "CMS demo projects are already under way. And P4P is a major direction employers and insurers are considering," and some health plans are already implementing P4P. At press time, Congress was grappling with budget problems and appeared likely not to take up legislation including P4P this year.

As AAFP has considered P4P plans, it has used its P4P policy as a guide. "We've been quite upfront about what is and isn't acceptable," says Frank. "I encourage our members to use the AAFP policy as they help shape the plans."