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Selection incentives in a performance-based contracting system.

Yujing Shen1

  • 1Boston University School of Public Health, MA, USA.

Health Services Research
|June 6, 2003
PubMed
Summary
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Performance-based contracting (PBC) incentivized substance abuse treatment providers to select less severe clients, reducing the proportion of high-severity patients treated. This suggests careful evaluation of such systems is needed.

Area of Science:

  • Health Services Research
  • Substance Abuse Treatment
  • Healthcare Policy

Background:

  • Nonprofit providers in substance abuse treatment may face incentives influencing client selection.
  • Understanding these incentives is crucial for effective public health program design.

Purpose of the Study:

  • To determine if performance-based contracting (PBC) encourages nonprofit substance abuse treatment providers to select less severe clients.
  • To analyze the impact of PBC on client severity in publicly funded treatment programs.

Main Methods:

  • Utilized data from the Maine Addiction Treatment System (MATS) for fiscal years 1991-1995.
  • Compared the likelihood of "most severe" clients in publicly funded outpatient programs before and after PBC implementation, using Medicaid clients as controls.

Related Experiment Videos

  • Employed multivariate regression analysis to assess PBC's effect on treating high-severity clients.

    • Main Results:

    • The percentage of high-severity clients in publicly funded outpatient programs decreased by 7% after PBC implementation (p < 0.001).
    • In contrast, the percentage of high-severity clients in the control group (Medicaid) increased by 2%.
    • Regression analysis confirmed a significant negative impact of PBC on the probability of treating most severe clients.

    Conclusions:

    • PBC created financial incentives for substance abuse treatment providers to select less severe patients to improve performance metrics.
    • The implementation of PBC led to fewer high-severity clients being treated in outpatient settings.
    • Payers and regulators should consider client selection biases when evaluating programs under PBC systems.