Insurer to offer quality rewards

CareFirst will pay doctors who meet new health criteria

January 16, 2008|By M. William Salganik | M. William Salganik,Sun reporter

CareFirst BlueCross BlueShield launched yesterday a new program designed to reward physicians for practices that improve patients' health - an approach it believes could ultimately lower medical costs.

CareFirst, the region's largest insurer with about 3 million members, said it would pay doctors as much as 7 percent extra for meeting a variety of standards of care. Those measures are a mix of process (if women get needed mammograms), service (if there are weekend or evening hours) and outcomes (if patients lower their cholesterol).

The standards for bonus pay are taken from national organizations such as Medicare, medical specialty societies and the National Committee for Quality Assurance (NCQA), the accreditation body for health insurers.

CareFirst has been experimenting with limited bonuses for doctors as a way to improve care for more than a decade, but this is by far its largest effort.

"We wanted to have a more impactful kind of program," said Dr. Jon Shematek, CareFirst senior vice president and chief medical officer.

Improvements in measuring quality have made the broader program feasible, said Bruce Edwards, CareFirst senior vice president for networks management. "It's now possible to come up with a next-generation pay-for-quality program," he said.

With the program, CareFirst becomes a regional leader in a national movement to change the way doctors and hospitals are paid. Medicare has several demonstration projects under way, and most private insurers have launched programs under the banner of "pay for performance" (often shorthanded as P4P) or "pay for quality."

For example, Aetna Inc., a large national health insurer, announced yesterday that when it negotiates contracts with hospitals, it will seek to include clauses requiring the hospital to report serious medical errors to states and accreditation authorities. And Aetna says it doesn't expect to pay for the most serious errors, such as operations performed on the wrong body part.

Some insurers are making doctors' quality ratings available to consumers. Others are creating "tiered networks" with lower co-payments for patients who use doctors who score as cost-effective. CareFirst has no plans for either, so far, Edwards and Shematek said, but doesn't rule them out for the future,

Changes in payment are "absolutely critical," said Dr. Anthony Shih, assistant vice president for quality improvement and efficiency at the Commonwealth Fund, a foundation that studies health issues. Paying doctors for the number of exams or procedures they perform, rather than how well they perform them, he said, results in a care system with "high volume but variable quality," in which doctors are not compensated for making efforts to keep patients healthy.

So far, Shih said, most of the programs are so new that there aren't definitive studies of whether they reduce costs or improve quality.

"CareFirst is somewhat typical of the programs that are emerging, essentially layering incentives on the fee-for-service system," Shih said. "We question whether that's enough, or whether we need more fundamental reform."

It's also not clear whether the extra pay, typically between 2 percent and 8 percent above the standard payment, is enough incentive for doctors to take the extra steps needed to qualify, said Hildy Shaman, director of health industries for PricewaterhouseCoopers, who directed a study of such plans published in August.

Another problem: "They change the programs every year, and by the time you see the outcomes, the plan has changed," Shaman said.

But Francois de Brantes, chief executive officer of Bridges to Excellence, an organization started by employers to promote changes in doctor and hospital reimbursement, said studies now being reviewed by medical journals for publication in the next several months will show that with well-designed incentives, doctors and hospitals "absolutely deliver quality care and are more efficient."

The efficiency, he said, is enough to pay for the costs of the bonuses, making the system no more costly overall. He added that most of the pressure for payment reform has come from employers, who are looking to keep their work force healthy and hold down medical costs.

His organization endorsed CareFirst's effort - the first P4P program in the country to win that designation. He said the designation program was just beginning, and that a "handful" of other programs would be recognized next month.

As programs have become more widespread, physician groups, who initially opposed them, have begun to try to shape them, said Shaman of PricewaterhouseCoopers. "There was a period of time when there was a lot of resistance, but those days are gone," she said. "They may not love it, but this is reality."

Dr. Martin Wasserman, executive director of MedChi, the state's largest organization of physicians, said Maryland's doctors welcome the program in principle.

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