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Table of Contents
Introduction....................................................................................................................... 1
Problem Statement and Magnitude ................................................................................ 1
Community of Interest ..................................................................................................... 2
Key Determinants ............................................................................................................. 3
Intervention ....................................................................................................................... 5
Conclusion ......................................................................................................................... 6
References.......................................................................................................................... 7
Appendix A. Socio-Ecological Conceptual Model........................................................ 10
Appendix B. Logic Model for Intervention .................................................................. 11
Appendix C. Example Incentive Programs for Small and Large Providers............. 12
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Introduction
Clinical decisions of providers are one of the core factors influencing healthcare
outcomes and are often directly tied to the financial incentives and reimbursement
strategies established within a provider setting.1
The current state of healthcare in the
United States is one of extremely high expenditure without a clear corresponding increase
in quality.2
The Institute of Medicine’s six aims for improving quality in healthcare
delivery fall under the categories of safety, effective, patient-centered, timely, efficient,
and equitable healthcare.3
In order to accomplish these goals, financial incentives must be
aligned with quality and performance measures and these measures must derive from
meaningful data collection.3-6
Financial incentives for providers are an increasingly
popular way to attempt to influence overall healthcare outcomes but the efficacy of these
incentives must be continuously examined to prevent a further waste of resources and the
use of direct financial incentives needs to be cautiously implemented based on evidence.7
Problem Statement and Magnitude
Determining whether financial incentives for providers are an effective means of
improving healthcare outcomes for patients and reducing inefficiencies within our
healthcare system is a multi-faceted issue. The current system of fee-for-service delivery
drives high healthcare costs because the incentive lies in performing more services but
does not necessarily increase quality.8
The sheer magnitude of financial incentives that
could potentially be introduced to various provider settings makes choosing the
appropriate incentive or combination of incentives an onerous task.9
One difficulty lies in
the fact that despite one successful implementation, the replication of similar results in
other provider settings is not assured.10
Applicability of incentives that work in a large
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provider system may not translate to a solo or small group practice.5
Ensuring that
smaller practices and individual providers are not lost in the transition towards
accountable care organizations that involve high start-up capital and advanced healthcare
technology is a concern for many practices around the country.6
Current methods of reimbursement include capitation, fee for service, pay-for-
performance, and under accountable care organizations there is the shared savings
model.9,11
Most financial incentives are contained within these reimbursement systems or
they are used in addition to existing reimbursement schemes.12
Defining the parameters
of success of a financial incentive program when there is no universal definition of what
constitutes a successful intervention or an increased measure of quality can make
determining effectiveness difficult and often unclear.13
There are also numerous players
that may need to collaborate for successful incentive programs that include providers,
insurance companies, beneficiaries, and government agencies and stakeholders.4
Community of Interest
Providers are the target population for financial incentives aimed at improving
quality and reducing cost. Healthcare systems in both developed and developing nations
have had mixed results with use of financial incentives, indicating that there are potential
implications with regard to the ethnicity and cultural background of the providers.14,15
There is also a distinction between providers that work in self-owned practices and small
group practices compared to providers that are in a large provider network or a part of an
accountable care organization.16,17
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Key Determinants
Biology
The biological makeup of providers varies widely and can directly affect how
they respond to financial incentives to deliver care. Specific indicators include the age of
the physician, where the physician went to school and trained, gender, religious
background and upbringing, value system, ethnic background, socioeconomic
background, and any personal biases that may exist.9,18
Behaviors
Provider behaviors implicated in decision making include prescribing habits,
personal work ethic and amount of time spent in preparation, numbers of tests ordered for
patients, physician self-monitoring, personal spending habits, and the size of the
workload the physician chooses to take on.19,20
The target income level of the provider
will affect whether a financial incentive would be an important factor tying directly into
family financial obligation.21,22
There is also an implicit assumption that all providers
practice in the best interest of their patient.20
Social Environment
The provider setting dictates the structure and the magnitude of incentive that will
be given to the provider. Different settings include hospitals, clinics, ambulatory care
centers, offices, and nursing homes.10
The organizational structure and culture of the
provider setting can affect the success of incentives and the proportion of the group to
which the incentive is relevant. If performance measurements set by the provider setting
and incentives are aligned with these outcomes, a provider’s decision to participate may
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change with an increasingly congruent plan.23
The specialty of the provider is also
important in whether incentives will be effective.
Physical Environment
The access of the provider to the tools necessary to improve quality is important.
Providers practicing in rural or impoverished areas may have very different responses to
incentives than providers practicing in urban or in higher income locations.24
Different
geographic locations are often tied in with different patient populations who have
different diseases and these are also factors providers react to when providing care.25
Policies and Interventions
The structure of the incentive is crucial to provider participation.16
Government
policy factors include government insurance reimbursements from Medicare and
Medicaid. Provider adherence to clinical guidelines set by academic institutions and what
the status quo of quality provision is among a provider community are both indicators of
the likelihood of incentives working within that provider community.26
The introduction
of the Patient Affordable Care Act will have huge implications for providers if the
methods of reimbursement change and shared savings models begin to dominate the
healthcare arena.27
Access to Quality Health Care
The lack of reimbursements and the inability of many patients to pay their
copayments and deductibles have led to an endemic increase in over-testing, over-
prescribing, and over-diagnosing.28
Providers don’t necessarily need incentives to
provide increased access to quality care but under current reimbursement schemes they
have more of an incentive to increase quantity and this has increased the cost burden.29
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Intervention
Financial incentives designed to change clinical behavior will not be successful
in every setting and successful interventions will take into consideration certain factors
before planning an incentive for providers.30
Financial incentives should be used in
extremely defined settings for defined problems within defined populations where
measurable results can be produced indicating movement towards a desired increase in
quality.17,31,32
An advantage large provider settings have compared to small provider
settings is the ability to assume more risk, higher capabilities for infrastructure and
technology implementation, and a larger pool to measure performance improvement and
quality metrics.4,25,33
This is important when evaluating whether a provider setting is able
to participate in shared savings models.6
There are interventions, however, that can work
in both small and large provider settings. (Refer to Appendix C) Examples of this are
absolute threshold, directly measurable incentives like increased vaccinations, reduced
repeat unnecessary lab tests, and increased cancer screening.20
Incentives of any kind should be explicitly described and known to providers and
they should be aware of what entity is paying for the intervention.34
Determining short-
term goals as compared to long-term goals is important when coming up with metrics of
success for the incentive.21,35
Different metrics that should be considered for examination
should include the provider population providing the data, the percentage of patients
being targeted for the incentive, the expected overall effects of the incentive, and the type
of feedback given.9,36-38
On the reverse side of financial incentives, financial risks and
penalties may also serve to influence and change physician behavior.13
A large emphasis
on financial incentives within a setting can potentially decrease intrinsic motivation when
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amplified by organizational pressure.39
The ACO model of financial incentives under
shared savings is an example of a financial incentive that ties cost reduction directly with
quality improvement and shared savings but within ACO models the geographical region,
technology capabilities, already-existing infrastructure, quality metrics, stakeholders, and
provider organizational culture will determine whether an ACO model should be
implemented or not.27,34,40,41
Conclusion
$ Financial incentives are not going anywhere and will continue to be implemented
in a variety of healthcare settings. In order for these incentives to be utilized properly, the
healthcare community needs to understand that financial incentives and reimbursement
strategies are provider and setting specific and implement incentives accordingly.
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Appendix B. Logic Model for Intervention
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Resources
1. Medicare/
Medicaid Data
(Dartmouth
Atlas)
2. Provider
Setting (ex:
Geisinger
System,
Accountable
Care
Organizations)
3. Insurance
Companies
4. State
Government
Initiatives/
Funding
Outputs
1. # Rate
Reduction of
unnecessary tests
2. # Meetings
between
administrators
and providers
3. # Performance
Reports and #
Data Metrics
Shared
4. #Incentivized
Clinical Actions
(ex childhood
vaccinations,
cancer screening
tests, STD tests,
physical
examinations, flu
shots)
Outcomes
1. Reduced excess
expenditure and waste
in provider setting (ex
reduced # of repeat
lab/imaging tests
ordered)
2. Financial incentives
aligned with quality
measures agreed upon
by providers and
administration as a
result of increased
communication
3. Faster, more
streamlined
reimbursement for
providers in
conjunction with a
reduction in
unnecessary payment
for extra tests
4. Increased amount of
specific, commonly
required/necessary
services provided more
frequently and
enthusiastically by
providers
Logic Model: Financial Incentives meant to change Provider
Behavior resulting in improved quality and reduced cost
Assumptions: Providers want best possible outcomes for patients
while being reward financially for delivering high quality healthcare
External Factors: Payment methods to providers affects
their clinical decision making; changes in decision making
may lead to decreased cost and increased quality
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Activities
1. Examining high cost
tests and comparing
results to increased
health value
2. Physician engagement
in planning relevant
payment strategies and
looking at implementing
incentive programs in
environments proven to
work
3. Improving feedback
loop and dialogue between
providers and insurance
companies for effective
reimbursement
4. Choosing specific goals
to be incentivized for
providers in alignment
with government health
goals
Impact
1. Overall cost
burden of
healthcare system
reduced
2. Integration
between providers
and administration
directed at
successful
incentive programs
3. Shift from over-
utilization of
resources and
resistance of
reimbursement
from insurance
companies to
alignment of goals
between providers
and insurance
companies
4. Improved local
and state health
outcomes for the
patient population
of provider’s
receiving
incentives
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Appendix C. Example Incentive Programs for Small and Large Providers
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