Increased Bonuses Seen as Key in Pay-for-Performance Systems

Kerry Dooley Young

February 20, 2019

Larger bonuses may result in more effective care of patients with common chronic illnesses, a small study of the pay-for-performance approach for physicians found.

In an article published online February 8 in JAMA Network Open, Amol S. Navathe, MD, PhD, of the University of Pennsylvania in Philadelphia, and colleagues found greater improvement in quality measures for physicians who could get larger bonuses than those who were not eligible for such an increase.

Many insurers and healthcare systems are turning to pay-for-performance (P4P) systems, with Medicare's recent changes in the fee-for-service program serving as a "centerpiece" for these efforts, the researchers write. According to Medicare, more than 1 million physicians and other clinicians were eligible for its Merit-based Incentive Payment System (MIPS) in its start-up year of 2017.

"However, P4P has not produced consistently positive results" in testing, the authors note.

To test the potential benefits of increasing P4P bonuses, Navathe and colleagues designed what they called a "pragmatic" randomized clinical trial. It centered on care of patients with at least one of five chronic conditions: asthma, chronic obstructive pulmonary disease, type 2 diabetes, coronary artery or ischemic vascular disease, and congestive heart failure.

The investigators conducted their study within one healthcare system, Downers Grove, Illinois-based Advocate Physicians Partners, which already has a well-established P4P program, the authors explain.

The researchers compared 2015 and 2016 performance on quality measures for 33 physicians from Advocate's Trinity group to those of 33 of their counterparts who worked elsewhere in the healthcare organization. 

The Trinity physicians were selected to serve as the test group eligible for larger bonuses because this unit's physician quality scores have been consistently lower than others in the system. Trinity has many patients in underserved areas, which may factor into the lower scores, according to Navathe.

"Advocate asked us to work with Trinity because of the potentially greater opportunity for improvement and also because of a desire to improve care for patients with more challenging circumstances," Navathe told Medscape Medical News.

For Trinity physicians in the test program, maximum P4P bonuses were larger than previous years by a mean of $3355 per physician, representing an increase of about 32% in total, or $16 per patient under the participating physician's care (from $52 to $68 per patient). Navathe and colleagues said the system's quality metrics and scoring methods were left unchanged. Thus, they served as an active control condition to compare results for those eligible for larger bonuses in the test against those reported for other Advocate physicians.

Patients of physicians involved with the test of larger bonuses had an increase in the mean rate of receiving evidence-based care of 4.1 percentage points, rising from a score of 85% in 2015 to 89.2% in 2016, the authors say. That was double the comparison group's increase of 2.0 percentage points (86.2% to 88.2%).

Significant increases were noted in several measures for the patients under the care of the Trinity physicians in the test of larger bonus size. These included:

  • achieving blood pressure control (1.6 percentage point increase vs 4.3 percentage point decrease; P < .001)

  • receiving a foot examination with a diabetes diagnosis (7.5 percentage point increase vs 0.4 percentage point increase; P < .001)

  • counseling about cessation of tobacco use (6.5 percentage point increase vs 1.1 percentage point decrease; P = .04)

In this study, Navathe and colleagues also wanted to see if certain behavioral economic principles might increase the effectiveness of a bonus, so they tested the effect of increased social pressure among some of the participants in the study. For them, the proportion of their bonus determined by group performance increased to 50% from 30%.

The researchers also sought to test a principle known as loss aversion. Some participants were provided with a path for access to funds placed in virtual accounts, which represented about 50% of expected financial incentives for the previous year. Physicians in this group thus were at risk for having to pay back funds if they earned less through the P4P bonus than had been placed in the virtual accounts.

"This intervention group was exposed to the behavioral economic principles of an endowment effect, in which people work harder not to give up something they already have," Navathe and colleagues write. "However, the risk of overdrawing was quite small, because 94% of physicians earned at least 50%" of what their bonuses had been the prior year.

Neither the increased social pressure nor the loss aversion appeared to improve quality of care, the authors observe. In the paper, they note limitations of their work, including a small sample size, use of a single health system, and participant dropout.

"However, these limitations represent the pragmatic nature of the study, because many physician networks and health plans face these challenges," the researchers explain. "Further refinement of applications of behavioral economic principles in P4P design should be tested with larger sample sizes."

Grants from the Commonwealth Fund and the Robert Wood Johnson Foundation supported the study.

Navathe reports receiving grants from Hawaii Medical Services Association, Anthem Public Policy Institute, Oscar Health, and CIGNA Corporation; personal fees from Navvis & Company; Navigant, Inc; Lynx Medical; Indegene, Inc; Sutherland Global Services; Elsevier Press; Navahealth; Cleveland Clinic; and Agathos, Inc; and serving as an uncompensated board member from Integrated Services, Inc, outside the submitted work.

The remaining authors report a variety of relevant financial relationships with numerous pharmaceutical and other healthcare companies. A complete list is available on the journal's website.

JAMA Network Open. Published online February 8, 2019. Full text

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