Could Pay-For-Performance Worsen Health Care Disparities?

A new study by the RAND Corp. in the May 2010 issue of Health Affairs found that pay-for-performance, or P4P, programs may unintentionally divert medical resources away from the communities that need them the most.

The study was designed to simulate the effect that an average P4P program would have on 438 primary care practices in Massachusetts. According to the authors, practices in the study provided care for about 90 percent of the patients in the state who were eligible for a P4P measured service and who were enrolled in a participating managed care plan in 2007.

The researchers found that average-sized practices, which served the highest proportion of vulnerable populations, would receive about $7,100 less each year in P4P rewards than other similarly sized practices.

"Paying for performance may have the unintended effect of diverting medical resources away from the communities that need these resources the most," said Mark Friedberg, M.D., M.P.P., the lead author of "Paying For Performance in Primary Care: Potential Impact on Practices and Disparities," in a May 4 press release.

According to the study, P4P programs could create problems in vulnerable communities because "if providers believe that P4P programs inadequately account for patients' characteristics, such programs may prompt providers to avoid racial and ethnic minorities and those of low socioeconomic status."

In addition, says the study, low-income patients are treated by a relative few health care professionals. "If these providers received lower performance-based payments than others do, new resources will be steered away from the care of vulnerable patient populations, potentially exacerbating health care disparities."

Friedberg, who is a board-certified internist and an associate natural scientist at RAND, said policymakers need to keep a close eye on the distribution of money for such programs because P4P programs "have the potential to make (health care) disparities worse."

The study authors noted that P4P programs are becoming increasingly popular as a means of stimulating quality improvement in physician practices. However, because the reduction of health care disparities is also an important policy goal, the authors suggested that policymakers institute the following P4P protocols: