Health plan pay-for-performance strategies.

Area of Science:

• Health Services Research
• Healthcare Management
• Health Economics

Background:

• Pay-for-performance (P4P) programs link financial incentives for hospitals and physicians to quality and efficiency.
• These programs are increasingly adopted by health plans at the community level.
• Understanding the strategic implementation of P4P is crucial for healthcare stakeholders.

Purpose of the Study:

• To examine the strategies, planning, development, and implementation of P4P programs by health plans.
• To identify differences in P4P program design and execution across various local markets.
• To understand the perspectives of health plans, providers, employers, and policymakers.

Main Methods:

• A qualitative study involving site visits to 12 nationally representative metropolitan areas.
• Protocol-driven interviews with over 1000 representatives from health plans, provider organizations, employers, and policymakers.
• In-depth executive interviews within 35 health plans across the 12 communities.

Main Results:

• A growing number of health plans are implementing P4P programs for physicians and hospitals.
• Significant design variation exists within and across markets, reflecting local conditions like IT capabilities, data availability, and stakeholder leverage.
• Providers express concerns regarding administrative burden and potential conflicts from customized P4P incentives.

Conclusions:

• Health plans demonstrate commitment to P4P programs, despite early implementation stages.
• Providers generally prefer standardized P4P measures and methods, which is unlikely due to diverse local market environments.
• National standardization efforts could reduce customization but may also limit local collaborative opportunities.