The P4P Band-Wagon Rolls, But in Whose Interests?

We have posted skeptically here and here about pay for performance (for physicians) (P4P), one of the most fashionable notions in health care management circles. Briefly, our concerns were that P4P could lead to perverse incentives (by rewarding apparently better rates of good outcomes which could be created by avoiding the sickest patients, or emphasizing a few measured processes and thus distracting physicians from doing anything else, or being based on inaccurate or irrelevant data), could emphasize cost cutting over quality, and could emphasize processes which have been better studied, potentially penalizing the specialties that did the most research about quality.

Nonetheless, the august US Institute of Medicine (IOM), part of the National Academies of Science (NAS), has recently given P4P another push. According to the Hartford Courant,

In a report to Congress released Thursday, the respected Institute of Medicine endorsed the system called "pay for performance," under which doctors who treat Medicare patients would get paid more for doing a better job.

Since it was enacted in 1965, Medicare has paid doctors for how much they do, said Robert Galvin, director of global health care for General Electric in Fairfield and a member of the Institute of Medicine Committee.

"This is based on how well they do," he said. "That's a big conceptual change."

The system for measuring quality of care is still evolving, but essentially would work this way:

Treatment prescribed by a doctor - including tests, drugs and other procedures - would be measured against a list of scientifically proven standards for treating a given condition. A doctor would gain points toward bonus pay for each standard met.

The new system, which could take years to implement, is designed to save federal money by providing better care that prevents expensive complications and hospitalizations.

Thus the authors of the report did not seem overly worried about the concerns we raised above. The report may also have been written before the publication of a systematic review of pay-for-performance (Petersen LA, Woodard LD, Urech T et al. Does pay-for-performance improve the quality of health care? Ann Intern Med 2006; 145: 265-272.) That review concluded that although there was some evidence of improvements in quality, "in all, 4 studies suggested unintended effects of incentives."

Another question is whose interests the IOM report really represents. The Center for Science in the Public Interest (CSPI) recently released a report about conflicts of interest at the NAS, including the IOM, "Ensuring Independence and Objectivity and the National Academies." To quote its executive summary,

This report focuses only on the selection process for and composition of NAS panels.
In 1997, NAS committees funded by the federal government came under the jurisdiction
of the Federal Advisory Committee Act (FACA). Congress required the agency to avoid using scientists with direct conflicts of interest on study panels (unless their expertise is deemed essential and not available elsewhere) and to seek balance on points of view. This report found serious breaches of both of those rules.
Finding: Nearly one out of every five scientists appointed to an NAS panel has
direct financial ties to companies or industry groups with a direct stake in the outcome of that study. This consistent pattern of appointing scientists with conflicts of interest clearly violates the spirit of the Federal Advisory Committee Act amendments that apply to NAS.

Finding: NAS did a poor job of balancing points of view on a majority of the study panels examined. The NAS does not appear to consider information about potential bias or conflicts of interest prior to nominating individuals to a committee. As a result, about half the panels examined had scientists with identifiable biases who were not offset by scientists with alternative points of view.

Finding: The NAS provides brief biographies of nominees to its committees on the agency’s website. Such biographies could assist people who were considering commenting on a committee’s composition. However, those biographies are woefully
inadequate because, in a majority of cases, they fail to provide crucial data
regarding conflicts of interest and points of view.

The 23 authors of the IOM report on P4P, "Rewarding Provider Performance: Aligning Incentives in Medicare," include several from large corporations presumably in their role as employers (e.g., General Motors, General Electric, and JP Morgan Partners.) Based on CSPI's findings, it should come as no surprise that a there were several others with apparent conflicts of interest which were not revealed in the listing of the committee responsible for the IOM report, that on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvemnt Programs.

Most strikingly, the committee included four people who were members of the boards of directors of 13 various health care corporations. Three of these individuals were identified only as academics, and one only as an employee of a corporation not obviously involved in health care:

• Nancy-Ann Min DeParle, identified as a Senior Advisor, JP Morgan Partners LLC. Ms DeParle is a member of the board of directors of Boston Scientific, Triad Hospitals, Cerner, and DaVita Corporation.
• William A Peck, identified as Director, Center for Health Policy, WAshington University School of Medicine. Dr Peck is a member of the board of directors of Angelica Corporation.
• Samuel O Thier, identified as Professor of Medicine and Health Car Policy, Harvard Medical School. Dr Thier is a member of the board of directors of Charles River Laboratories and Merck.
• Gail R Wilensky, identified as Senior Fellow, Project HOPE. Dr Wilensky is a member of the board of directors of Cephalon, Gentiva Health Services, ManorCare, Quest Diagnostics, SRA International, and UnitedHealth Group.

Thus the band-wagon for P4P rolls on, but whose interests it represents remains unclear. Clearly industry may see it as a way to cut costs and make more money. Whether it will be good or bad for patients remains unclear.