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Pay for performance in your future? Plan on it, expert says

Very few hospitalists now get compensated for hitting specific quality measures—but that may be about to change

From the December ACP Observer, copyright 2005 by the American College of Physicians.

By Gina Shaw

PHILADELPHIA—As part of a hospital medical staff, do you get paid more based on defined quality measures, such as a certain percentage of heart attack patients receiving aspirin at arrival and discharge?

Right now, your answer is probably "no"—but stay tuned. The salaries of hospitalists and other internists may not currently reflect some inpatient performance factors, but that is likely to change within the next two years, according to a hospital medicine expert who spoke at the 2005 Hospitalist Conferences USA series this fall.

Hospitalist Winthrop F. Whitcomb, ACP Member, director of performance improvement at Mercy Medical Center in Springfield, Mass., and a founder of the Society of Hospital Medicine, pointed out that the Centers for Medicare and Medicaid Services (CMS) has promulgated a new set of quality measures that include nearly 20 measures in four disease categories.

At the same time, the law that will usher in the new Medicare prescription drug benefit next month also gives the CMS the ability to ding hospitals with a 0.4% lower update for 2005 if they don't report on 10 of those measures. Given such developments, he said, it's only a matter of time before the compensation of individual physicians as well as of hospitals will begin to rise or fall based in part on quality.

"The payment landscape is going to change drastically—and that change will begin soon," Dr. Whitcomb said.

Getting out in front

Thirty-five health plans covering some 30 million patients now offer pay-for-performance programs, Dr. Whitcomb said; next year, 80 plans with about 60 million members are expected to be on board. Hospitalists and other hospital-based internists, he suggested, can get out in front of the changing compensation curve by working closely with their hospital's quality improvement department to establish their own pay-for-performance programs.

That's what Dr. Whitcomb and his group at Mercy Medical Center did last year, after Blue Cross of Massachusetts rolled out a hospital-focused quality improvement program. The 200-bed Mercy would receive roughly $300,000 in additional reimbursement if it met three defined quality targets: a 45% screening and administration rate for pneumonia vaccine in pneumonia patients; an 85% usage rate of angiotensin-converting enzyme (ACE) inhibitors for congestive heart failure patients; and an 85% left ventricular assessment rate for congestive heart failure as well.

Seeing that the hospitalists at Mercy controlled 80% of the processes involved in achieving those three measures, Dr. Whitcomb's 10-physician group negotiated with hospital administrators. The hospitalists would be responsible for achieving those goals—and would receive one-third of the $300,000 pie if they succeeded.

"We beefed up our existing infrastructure around quality monitoring," explained Dr. Whitcomb. Each patient chart for pneumonia or congestive heart failure was reviewed weekly by a part-time, quality RN case manager.

Next, all "misses"—failure to meet the criteria—were reviewed every Monday by Dr. Whitcomb, who then gave one-on-one feedback to the individual physician. That meant phone calls, not memos. "Direct contact always gets a better response," he said.

The results were impressive: Pneumovax rates reached 92.8%, while ACE inhibitor administration got to 97.6%, and left ventricular assessment hit 99.5%. (Pneumovax rates before the incentives had hovered under 60%.) The hospital got its additional $300,000 from Blue Cross, and each hospitalist in the group received a $10,000 bonus.

"It was the first time in the institution's history that people were paid for quality care," Dr. Whitcomb said.

Getting started

To institute a similar program, physicians should first enlist the support of hospital leadership. One way to generate that support is to talk with local payers about pay for performance.

"If you call the medical directors for your local Blue Cross insurer, you'll probably be surprised at how enthusiastic they'll be," he said. Next, collaborate with your hospital's quality department to identify a set of performance measures, which should ideally mirror the facility's existing quality incentives.

"Don't do what the quality department isn't doing," he said. "Instead, piggyback on their existing infrastructure."

With inpatient pay-for-performance programs now in their fledgling stage, Dr. Whitcomb claimed this was the best time for internists to shape their development at their institutions.

"This is the best near-term hope," he said, "for financial recognition of hospitalists' value."

Gina Shaw is a freelance health care writer based in Montclair, N.J.

The information included herein should never be used as a substitute for clinical judgment and does not represent an official position of ACP.

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