Pay-for-performance for healthcare providers: Design, performance measurement, and (unintended) effects

Healthcare systems around the world are characterized by a suboptimal delivery of healthcare services. There has been a growing belief among policymakers that many deficiencies (e.g., in the quality of care) stem from flawed provider payment systems creating perverse incentives for healthcare providers. In several countries this has led to reforms based on pay-for-performance (P4P), a payment approach in which healthcare providers receive explicit financial incentives to improve the quality and efficiency of care. Over the past decade, P4P has attracted widespread interest, with programs being uncritically implemented in many countries. In contrast to what this interest suggests, however, to date P4P does not appear to have been very effective in delivering the desired improvements. Moreover, several unintended effects have been demonstrated. In part, these disappointing results may well have been due to the limited knowledge about crucial aspects of the design and implementation of P4P. By identifying and analyzing these aspects, synthesizing empirical literature on (unintended) effects of P4P, and addressing important empirical questions about performance measurement, this thesis aims to provide insight in key conceptual and practical issues in the design and implementation of P4P for healthcare providers

Uitkomstbekostiging in de zorg: een (on)begaanbare weg?

__Abstract__ In veel landen – waaronder Nederland – groeien de zorgkosten sterker dan de economie, schiet de kwaliteit van zorg op diverse punten tekort, en duidt praktijkvariatie op ruimte voor het verhogen van de doelmatigheid van zorg. Inadequate bekostigingssystemen en de gebrekkige transparantie van de kwaliteit van zorg worden vaak genoemd als belangrijke oorzaken van deze problemen. Zo was een belangrijke conclusie van de recente evaluatie van het zorgstelsel dat het bij zorgaanbieders vaak nog ontbreekt aan financiële prikkels voor kwaliteit en doelmatigheid

Inkoop huisartsenzorg nog een gok

Verzekeraars willen grip op de kwaliteit die zorgverleners leveren. De mogelijkheden hiervoor zijn bij huisartsen veel beperkter dan bij bijvoorbeeld fysiotherapeuten. Er is behoefte aan objectieve criteria om kwaliteit van zorg in kaart te brengen

High-risk pooling for mitigating risk selection incentives in health insurance markets with sophisticated risk equalization:an application based on health survey information

Background: Despite sophisticated risk equalization, insurers in regulated health insurance markets still face incentives to attract healthy people and avoid the chronically ill because of predictable differences in profitability between these groups. The traditional approach to mitigate such incentives for risk selection is to improve the risk-equalization model by adding or refining risk adjusters. However, not all potential risk adjusters are appropriate. One example are risk adjusters based on health survey information. Despite its predictiveness of future healthcare spending, such information is generally considered inappropriate for risk equalization, due to feasibility challenges and a potential lack of representativeness. Methods: We study the effects of high-risk pooling (HRP) as a strategy for mitigating risk selection incentives in the presence of sophisticated– though imperfect– risk equalization. We simulate a HRP modality in which insurers can ex-ante assign predictably unprofitable individuals to a ‘high risk pool’ using information from a health survey. We evaluate the effect of five alternative pool sizes based on predicted residual spending post risk equalization on insurers’ incentives for risk selection and cost control, and compare this to the situation without HRP. Results: The results show that HRP based on health survey information can substantially reduce risk selection incentives. For example, eliminating the undercompensation for the top-1% with the highest predicted residual spending reduces selection incentives against the total group with a chronic disease (60% of the population) by approximately 25%. Overall, the selection incentives gradually decrease with a larger pool size. The largest marginal reduction is found moving from no high-risk pool to HRP for the top 1% individuals with the highest predicted residual spending. Conclusion: Our main conclusion is that HRP has the potential to considerably reduce remaining risk selection incentives at the expense of a relatively small reduction of incentives for cost control. The extent to which this can be achieved, however, depends on the design of the high-risk pool.</p

Selection Incentives for Health Insurers in the Presence of Sophisticated Risk Adjustment

This article analyzes selection incentives for insurers in the Dutch basic health insurance market, which operates with community-rated premiums and sophisticated risk adjustment. Selection incentives result from the interplay of three market characteristics: possible actions by insurers, consumer response to these actions, and predictable variation in profitability of insurance contracts. After a qualitative analysis of the first two characteristics our prima

Incorporating self-reported health measures in risk equalization through constrained regression

Most health insurance markets with premium-rate restrictions include a risk equalization system to compensate insurers for predictable variation in spending. Recent research has shown, however, that even the most sophisticated risk equalization systems tend to undercompensate (overcompensate) groups of people with poor (good) self-reported health, confronting insurers with incentives for risk selection. Self-reported health measures are generally considered infeasible for use as an explicit ‘risk adjuster’ in risk equalization models. This study examines an alternative way to exploit this information, namely through ‘constrained regression’ (CR). To do so, we use administrative data (N = 17 m) and health survey information (N = 380 k) from the Netherlands. We estimate five CR models and compare these models with the actual Dutch risk equalization model of 2016 which was estimated by ordinary least squares (OLS). In the CR models, the estimated coefficients are restricted, such that t

Value-Based Provider Payment Initiatives Combining Global Payments With Explicit Quality Incentives

An essential element in the pursuit of value-based health care is provider payment reform. This article aims to identify and analyze payment initiatives comprising a specific manifestation of value-based payment reform that can be expected to contribute to value in a broad sense: (a) global base payments combined with (b) explicit quality incentives. We conducted a systematic review of the literature, consulting four scientific bibliographic databases, reference lists, the Internet, and experts. We included and compared 18 initiatives described in 111 articles/documents on key design features and impact on value. The initiatives are heterogeneous regarding the operationalization of the two payment components and associated design features. Main commonalities between initiatives are a strong emphasis on primary care, the use of “virtual” spending targets, and the application of risk adjustment and other risk-mitigating measures. Evaluated initiatives generally show promising results in terms of lower spending growth with equal or improved quality

Identifying prognostic factors for clinical outcomes and costs in four high-volume surgical treatments using routinely collected hospital data

Identifying prognostic factors (PFs) is often costly and labor-intensive. Routinely collected hospital data provide opportunities to identify clinically relevant PFs and construct accurate prognostic models without additional data-collection costs. This multicenter (66 hospitals) study reports on associations various patient-level variables have with outcomes and costs. Outcomes were in-hospital mortality, intensive care unit (ICU) admission, length of stay, 30-day readmission, 30-day reintervention and in-hospital costs. Candidate PFs were age, sex, Elixhauser Comorbidity Score, prior hospitalizations, prior days spent in hospital, and socio-economic status. Included patients dealt with either colorectal carcinoma (CRC, n = 10,254), urinary bladder carcinoma (UBC, n = 17,385), acute percutaneous coronary intervention (aPCI, n = 25,818), or total knee arthroplasty (TKA, n = 39,214). Prior hospitalization significantly increased readmission risk in all treatments (OR between 2.15 and 25.50), whereas prior days spent in hospital decreased this risk (OR between 0.55 and 0.95). In CRC patients, women had lower risk of in-hospital mortality (OR 0.64), ICU admittance (OR 0.68) and 30-day reintervention (OR 0.70). Prior hospitalization was the strongest PF for higher costs across all treatments (31–64% costs increase/hospitalization). Prognostic model performance (c-statistic) ranged 0.67–0.92, with Brier scores below 0.08. R-squared ranged from 0.06–0.19 for LoS and 0.19–0.38 for costs. Identified PFs should be considered as building blocks for treatment-specific prognostic models and information for monitoring patients after surgery. Researchers and clinicians might benefit from gaining a better insight into the drivers behind (costs) prognosis

Value-based provider payment: Towards a theoretically preferred design

Worldwide, policymakers and purchasers are exploring innovative provider payment strategies promoting value in health care, known as value-based payments (VBP). What is meant by 'value', however, is often unclear and the relationship between value and the payment design is not explicated. This paper aims at

Design and effects of outcome-based payment models in healthcare: a systematic review

Introduction: Outcome-based payment models (OBPMs) might solve the shortcomings of fee-for-service or diagnostic-related group (DRG) models using financial incentives based on outcome indicators of the provided care. This review provides an analysis of the characteristics and effectiveness of OBPMs, to determine which models lead to favourable effects. Methods: We first developed a definition for OBPMs. Next, we searched four data sources to identify the models: (1) scientific literature databases; (2) websites of relevant governmental and scientific agencies; (3) the reference lists of included articles; (4) experts in the field. We only selected studies that examined the impact of the payment model on quality and/or costs. A narrative evidence synthesis was used to link specific design features to effects on quality of care or healthcare costs. Results: We included 88 articles, describing 12 OBPMs. We identified two groups of models based on differences in design features: narrow OBPMs (financial incentives based on quality indicators) and broad OBPMs (combination of global budgets, risk sharing, and financial incentives based on quality indicators). Most (5 out of 9) of the narrow OBPMs showed positive effects on quality; the others had mixed (2) or negative (2) effects. The effects of narrow OBPMs on healthcare utilization or costs, however, were unfavourable (3) or unknown (6). All broad OBPMs (3) showed positive effects on quality of care, while reducing healthcare cost growth. Discussion: Although strong empirical evidence on the effects of OBPMs on healthcare quality, utilization, and costs is limited, our findings suggest that broad OBPMs may be preferred over narrow OBPMs