Sunday, March 11, 2007

What Is The Reason Behind Pay-For-Performance (P4P) System?

The American Medical Association (AMA) president William G. Plested III, MD wrote an article published in AMA news titled- Pay-for-performance: It's about cost control, not quality.

Pay-for-performance or P4P is a system with a premise that hospitals and physicians will be incentivized for better performance. The article by AMA president got me thinking about the reason behind pay-for-performance (P4P) concept.

Is it to assure quality? If this is to assure quality, what are the parameters of quality? I understand that tens of quality criteria are being measured for the calculation of incentives as a part of P4P.
A customer subconsciously uses tens of quality criteria before choosing a store that he or she buys groceries from. These criteria include: location of the store, parking, attitude of the employees, prices, placement of the goods- and the list goes on. The health care quality will need to be measured based on hundreds of quality criteria- some measurable (death rate, stroke rate etc.) and some not so easily measurable (emotional well-being, physician’s respect for patient’s belief system, etc.). Will we be able to measure all the important criteria for the purpose of P4P? If not, will we run the risk of ignoring the quality criteria that we are not being graded on- to the detriment of patient care?

Is it to cut cost? A common argument against ‘universal health care’ is that it will kill the type of care that American health system provides. This suggests people's satisfaction with quality of care. Moreover, commonest complaint against health care system at this time is the cost. Because of these issues, people wonder if pay-for-performance is a cost-cutting measure in the garb of a quality-enhancing measure. Is it? While it is easy to support attempts to get best value for every healthcare dollar spent, it is hard to imagine that P4P will be an effective cost-cutting measure.
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