Journal of the American College of Radiology
Volume 5, Issue 3 , Pages 168-173, March 2008

Pay for Performance and the Revolution in American Medical Culture

  • Frank J. Lexa, MD, MBA

      Affiliations

    • The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania.
    • School of Medicine, University of Pennsylvania, Philadelphia, Pennsylvania.
    • Corresponding Author InformationCorresponding author and reprints: Frank J. Lexa, MD, MBA, The Wharton School, University of Pennsylvania, GCP, 306 Gypsy, Wynnewood, PA 19096

Article Outline

Abstract 

The recent implementation of pay for performance by CMS in radiology practices is not going to be an isolated event. Instead, it reflects an early manifestation of what will likely be a revolution in how we work and how we are paid in diagnostic imaging. Examining the factors that underly this revolution are critical for understanding the next waves of change that will drive our future.

Key Words: Pay for performance, service, quality, metrics, doctor-patient relationship, safety

 

Future shock is the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.

—Alvin Toffler

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Introduction 

In 2007, many of the hot issues in medicine including radiology revolved around quality, service, and pay for performance (P4P). In the radiology community, there have been extensive discussions of the meaning of these concepts in diagnostic imaging, how they will be measured in both the public and private sectors, who will have access to the resulting information, and what they may do with it. On July 1, 2007, the Centers for Medicare and Medicaid Services (CMS) introduced a new monetary incentive to promote certain types of reporting language in reading out CMS imaging cases. This is likely just the first step in a much larger process.

In the next few years, we will likely see more extensive inducements, core requirements, and perhaps penalties to encourage specified performance parameters in radiology. For some in our profession, these changes were a shock and surprise, such as the recent cuts in reimbursement from the Deficit Reduction Act. In both cases, a deeper look suggests that these events were the result of changes that had been building up over time. Pay for performance is being driven by many forces, including safety concerns, cost, value, and cultural change in America. One way to avoid “future shock” is to better understand the underlying drivers of change in our profession and society so that we can better anticipate and prepare for these types of events.

As we adjust to these new changes and look carefully, we gain better perspective and understand that these quality and service challenges are neither completely new nor isolated events. Rather, they are the latest manifestations of a much more profound and longer term evolution in how American citizens view the health care system in the United States and how patients, payers, and other customers interact with it in sickness and in health. This article explores the factors that underlie these changes in the relationship between the American society and the medical profession, particularly our specialty of radiology. In particular, the historical context and the underlying cultural drivers of this transformation are explored to better understand why the events of the past 2 years are not isolated ones and why these types of changes will likely continue far into the future.

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Culture Shock 

In recent years, few articles about the US medical system have received as much attention as the work by the Institute of Medicine (IOM) in 1999 titled To Err Is Human: Building a Safer Health System [1]. This work was the first in a series of reports from the Quality of Health Care in America project aimed at producing improved quality in the system over the subsequent decade. Using 1997 data from Colorado and Utah, the report estimated that 44,000 Americans died annually from medical errors. The statistic rose to 98,000 when data from New York were used in the extrapolation model [1, p1].

This report generated significant debate within the medical community, with serious contentions that the actual number was either overestimated or underestimated in the original studies [2, 3]. Although a better estimate of the magnitude of this problem is certainly a worthy endeavor, the more important goals for us in medicine are to better understand the underlying problems that create errors and their consequences and then move to correct both the systemic and individual sources of critical mistakes.

The IOM report focused attention on concerns about safety and quality within the health care enterprise in the United States. Its estimates (or usually just the higher one) have been widely cited in newspaper and magazine reports on health care in the United States. The reported medical error fatality rate has been described as equivalent to the daily crash of a jumbo jet (a fully loaded Boeing 747-400 in a 3-class configuration carries >400 passengers [4]). It is an understatement to say that this dramatic analogy has captured the attention of the medical profession, the government, corporations, and the general population. Public concern has risen substantially, mistrust of the health care system has grown, and there are persistent calls for intervention.

The influence of this and subsequent articles on US society has been so profound that many in the media and within our profession have reacted with shock and awe to these events and blamed them for many of the profession’s current misfortunes. This overlooks several deeper cultural shifts that have been occurring in US society for decades. The nature of the doctor-patient relationship was changing all along. The timing was also critical; the report came after much of the public had had mixed experiences with managed care, which eroded the patient-doctor relationship and altered the perception of medicine from a profession to more of a business. The shock of the IOM report has been in many ways a catalyst for a process that had been smoldering along for decades. Of greater importance for our strategic planning is recognizing that this is only the beginning and we can expect greater changes in the near future.

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Historical Antecedents 

Some of the earliest concerns about quality arose from the issue of variability. Wide variations in surgical rates in different parts of the United States suggested that scientific evidence was not the sole driver of medical decision making. For those who study other types of complex systems, unexplained variability is a commonly used red flag for flawed decision making and errors. Even within smaller geographic areas, wide variability has been documented for decades [5]. Sophisticated analysis of medical errors have tended to focus on systems and processes rather than scapegoating individuals [6].

A closer look at the position of organized medicine in American society reveals that the revolution did not start in 1999. The decline in confidence in medicine seems to be part of a longer term trend of declining public confidence in many societal institutions since the middle of the 20th century. It is interesting that confidence in individuals running leading institutions in US society (science, religion, education, military, the press, etc) tends to rise and fall together while maintaining a semblance of relative rank [7]. Thus, at least part of the phenomenon is not specific to medicine and is rather a much larger sociologic evolution in how individuals perceive the major institutions in US society.

With that in mind, a lack of confidence in the overall medical system may not necessarily correlate with confidence in individual practitioners or with satisfaction with local facilities. It is possible that people may be happy with their individual care while expressing concern for the overall state of affairs in US medicine. This phenomenon is well described with regard to education, in which surveys may bemoan the decline of the US educational system while showing disparately high levels of satisfaction with local teachers and schools [8]. Similar surveys have been done demonstrating that violent crime is a consistent top-tier concern for voters even when the same survey population states that the respondents feel that they live in safe neighborhoods, that their children attend safe schools, and that they can safely take evening walks [8]. This likely represents a combination of factors, including dissonance between personal experience and media-influenced perceptions.

The point is that at the national level, the tone and nature of the relationship between patients and medical providers has been changing for some time and likely results from a combination of factors. At both the individual and at the societal levels, there is strong pressure for greater accountability, and the current push for P4P incentive programs is one manifestation of this response.

The concern over safety raised by the IOM report is one significant driver. This type of quantitative study coming on top of waning public confidence over the past decades makes it certain that scrutiny of medicine, its practitioners, and its methods will intensify. There will likely be many more calls for greater safety measures and public repositories of safety data on individual practitioners and institutions. It also is indicative of a change in perception of the profession from a mysterious, arcane art to a science that can be subjected to open scrutiny using scientific measurements.

A second driver of P4P today is cost. As health care expenditures have continued to exceed the rate of inflation and the growth of the gross domestic product, efforts at cost containment have grown, as has greater scrutiny into the value of the product that is being purchased. These pressures have escalated on both the public and private payer sides. The ongoing consumer revolution in health care will likely drive continuing strong individual patient attention to cost and value. Beyond these current issues is the largest problem facing health care in the United States. Looming in the too near future is the unfunded Medicare liability. Although exact measurements are both politicized and controversial, it is clear that Medicare costs will give at least 30 trillion to 60 trillion reasons why we can expect greater pressures on health care reimbursement for generations to come [9].

A third catalyst (and also symptom) of these changes is tort activity. In recent years, medical malpractice liability issues have reached crisis proportions in all but a small number of states [10]. An illuminating statistic with regard to the change over the past decades is that before 1960, only about 1 in 7 physicians was sued during an entire career, but now it is about 1 in 7 physicians each year [11, p299]. The relationship between physicians and patients has clearly changed, and unless you are a trial lawyer, this is an ugly trend.

Before moving into a discussion of some of the most vocal advocates of P4P, it should be noted that this patient-physician dissatisfaction seems to be mutual. There has been a significant decline over several decades in the job satisfaction of US physicians [12]. Although radiologists tend to be more satisfied than physicians are as a whole, their satisfaction has declined as well [13]. Of great concern for the future of the medical profession is a survey in 2003 that showed that approximately one-quarter would not pursue medical careers if they could do it over again. On the positive side, that statistic had decreased to 8% by 2006 [14]. From 1995 to 2006, the total number of enrolled medical students rose as did the population as a whole, but during the same period, the number of medical school applicants fell by over 15%, suggesting that demand for a career in medicine declined during that period [15].

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Organizations Leading the Pay-for-Performance Revolution 

To understand the P4P revolution, it is necessary to examine who is driving and pushing for change. An exhaustive list would be outside the scope of this report, so instead I focus on several key organizations that have been leading advocates.

The Leapfrog Group 

One of the most influential organizations leading the charge for P4P is the Leapfrog Group. The Leapfrog Group includes some of the largest corporations in the United States among its founders. These corporate supporters use quality assessment and improvement measures in their own firms and are strong advocates of their broad application in health care. In the group’s own words [16],

The Leapfrog Group and its members work to initiate breakthrough improvements in the safety, quality, and affordability of health care for Americans. Research has shown that patients receive recommended health care only 55% of the time and 30% of health care costs are due to poor care. Poor quality also means up to 98,000 deaths per year due to medical mistakes.

Leapfrog members commit to the Group’s purchasing principles and partner with other purchasers to mobilize their purchasing power to alert America’s health industry that big leaps in health care safety, quality, and customer value will be recognized and rewarded.

If the first three Leapfrog recommended safety and quality practices were implemented in every nonrural hospital in the United States we could save up to 65,341 lives and prevent up to 907,600 medication errors each year. Implementation could also save up to $51.3 billion annually.

There is a clear agenda, and the Leapfrog Group is making significant strides to implement P4P across the nation. The group has collected and summarized data on more than 100 P4P programs in the United States. This is part of a larger phenomenon of “value-based purchasing.” Leapfrog’s regions now include over half the US population and 58% of its hospital beds [17].

National Committee for Quality Assurance 

The National Committee for Quality Assurance (NCQA) is a private, not-for-profit entity. It produces the Health Plan Employer Data and Information Set reports, which are used by 90% of health plans to measure performance. The NCQA has developed report cards and other quality instruments. In NCQA’s [18] own words,

NCQA’s programs and services reflect a straightforward formula for improvement: Measure. Analyze. Improve. Repeat. NCQA makes this process possible in health care by developing quality standards and performance measures for a broad range of health care entities. These measures and standards are the tools that organizations and individuals can use to identify opportunities for improvement. The annual reporting of performance against such measures has become a focal point for the media, consumers, and health plans, which use these results to set their improvement agendas for the following year.

Robert Wood Johnson Foundation 

The Robert Wood Johnson Foundation was instrumental in the development of the Leapfrog Group. The foundation has also been influential in other ways, such as through grant support of health care quality initiatives. In the foundation’s own words [19],

The Robert Wood Johnson Foundation seeks to improve the health and health care of all Americans. To achieve the most impact with our funds, we prioritize our grants into four goal areas: … To improve the quality of care and support for people with chronic health conditions. One hundred million Americans suffer from chronic health conditions, and that number is almost certain to increase as the population ages. … To accomplish these goals, we use a variety of strategies. We support training, education, research (excluding biomedical research), and projects that demonstrate the effective delivery of health care services. Rather than paying for individual care, we concentrate on health care systems and the conditions that promote better health.

National Quality Forum 

An additional example of the type of organization promoting quality reporting is the National Quality Forum. This also is a not-for-profit entity developed as a public private partnership. In the group’s words, its goal is “to improve the quality of American health care by setting national priorities and goals for performance improvement, endorsing national consensus standards for measuring and publicly reporting on performance, and promoting the attainment of national goals through education and outreach programs” [20].

National Patient Safety Foundation 

The National Patient Safety Foundation (NPSF) was founded as a not-for-profit organization in 1997. In its own words [21],

NPSF remains the sole organization in the field with this singular focus. NPSF also occupies a unique position in this field by virtue of its inclusive, multi-stakeholder approach. From the composition of its Board to the structure of its programs, NPSF fosters collaboration on the issue of patient safety.

Physician Consortium for Performance Improvement 

The medical community has also responded to these forces with organizations of its own to address these issues from within the profession. Their mission is stated as follows [22]:

The American Medical Association (AMA)-convened Physician Consortium for Performance Improvement® (Consortium) is committed to enhancing quality of care and patient safety by taking the lead in the development, testing, and maintenance of evidence-based clinical performance measures and measurement resources for physicians.

The Consortium is comprised of over 100 national medical specialty and state medical societies; the Council of Medical Specialty Societies; the American Board of Medical Specialties and its member-boards; experts in methodology and data collection; the Agency for Healthcare Research and Quality; and the Centers for Medicare & Medicaid Services. Consortium advisory committees address issues related to measures implementation and evaluation; measure development, methodology, and oversight; and planning.

Consortium activities are carried out through cross-specialty work groups established to develop performance measures for physicians from evidence-based clinical guidelines for select clinical conditions. The Consortium selects topics for performance measures development that are actionable, for which established clinical recommendations are available, and for which feasible data sources exist. Work groups review the levels of evidence provided in clinical practice guidelines that demonstrate potential positive impact on health outcomes and propose feasible measures for inclusion in a physician performance measurement set.

In our own specialty, the ACR also has addressed this through several ongoing initiatives that have attempted both proactive efforts and direct responses to current events. These have been reviewed in detail by Swayne [23] and by Moser et al [24], among others.

These organizations and others are creating a revolution in quality and service in this nation. As of early 2007, the United States had approximately 100 active P4P programs in place, with estimates that the number may top 300 by early 2008 [25]. This momentum makes it imperative that you consider the types of impacts that P4P can have on your practice.

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Momentum and Diffusion of Pay for Performance in the United States 

Indirect and Direct Effects of Pay for Performance 

Pay for performance can affect you in 2 ways. First is the indirect form, and this was an early way that some radiologists first felt the effects of P4P on their referral patterns. This occurred when clinicians subject to P4P referred to radiology facilities. When patients filled out satisfaction surveys, good (or bad) experiences in diagnostic imaging had the potential to affect how they graded nonradiologist clinicians’ performance. In some programs, substantial proportions of referrers’ income was at risk as part of a “holdback” structure (see below for a discussion of types of P4P implementation programs) [26].

The second, which is now being implemented nationwide, is the direct form. Here, P4P metrics are applied directly to your radiology facility and practitioners. Your performance on these measures then determines directly how you are paid (or not paid) for your radiology services.

Pay for Performance: Centers for Medicare and Medicaid Services Initiatives 

Any discussion of health care in the United States needs to include the role of the federal government. The CMS is the largest purchaser of health care in the world, covering 92 million lives with projected spending of $657 billion in fiscal year 2008, or about one-third of US health care spending [27]. The CMS began using P4P in a pilot project with 10 large group clinical practices in 2005. At that time, the parameters included 32 quality measures of patient care. There was a clear goal of controlling the overall spending tab [28]. The Physician Voluntary Reporting Program debuted on January 1, 2006, with its initial focus on 16 performance measures in primary care, captured through G-codes [29].

The plan was expanded into imaging in 2007 through the following process. On December 20, 2006, the president signed the Tax Relief and Health Care Act of 2006. Section 101 under Title I authorizes the establishment of a physician quality reporting system by CMS. The CMS [30] has named the statutory program the Physician Quality Reporting Initiative (PQRI), which replaced the Physician Voluntary Reporting Program and establishes a financial incentive for eligible professionals to participate in a voluntary quality reporting program. Eligible professionals who successfully report a designated set of quality measures on claims for dates of service from July 1 to December 31, 2007, may earn a bonus payment, subject to a cap, of 1.5% of total allowed charges for covered Medicare physician fee schedule services.

Practical Issues with Federal Pay for Performance in 2007 

There are currently 74 measures listed on the CMS’s Web site that address how the quality program works, with many more planned. The specific language [31] states that

to satisfactorily meet the requirements of the program and receive the bonus payment, certain reporting thresholds must be met. When no more than three quality measures are applicable to services provided by an eligible professional, each such measure must be reported in at least 80% of the cases in which the measure is reportable. When four or more measures are applicable to the services provided by an eligible professional, the 80% threshold must be met on at least three of the measures reported. Note that this initiative applies to the traditional Medicare fee-for-service program only and is not applicable to the Medicare Advantage Plans, including the private fee-for-service plans.

An example of a radiology-specific requirement for diagnostic radiology is number 10, regarding computed tomographic or magnetic resonance imaging reports for stroke and stroke rehabilitation [32]:

Percentage of final reports for [computed tomographic] or [magnetic resonance imaging] studies of the brain performed within 24 hours of arrival to the hospital for patients aged 18 years and older with the diagnosis of ischemic stroke or [transient ischemic attack] or intracranial hemorrhage that include documentation of the presence or absence of each of the following: hemorrhage and mass lesion and acute infarction.

Note that as a practical point, because the final diagnosis is not known at the time of initial radiologic evaluation, a radiologist should thus report the presence or absence of these findings whenever ischemic stroke, transient ischemic attack, or hemorrhage is a clinical possibility. At some practices, this could be a significant fraction or even essentially all examinations (personal communication, name withheld).

Evidence-Based Practice of Pay for Performance and Getting Pay for Performance Right 

The thrust of the interest in P4P and related efforts is based on the assumption that this will improve patient outcomes. The deep cultural shifts described in this article are all catalysts for solutions that will address fundamental safety and quality issues. However, serious issues and concerns with P4P in radiology have been raised [23, 33, 34, 35]. This is a good time to ask the question, How many peer-reviewed studies have demonstrated improved patient outcomes with P4P in radiology? The answer to date is that we don’t know yet whether current efforts in P4P will significantly improve outcomes for our patients.

Some reports in the medical literature should give serious pause to those who blithely believe that compliance with current P4P parameters will lead to better outcomes. Two recent articles in JAMA looked at the linkage between performance compliance and outcomes. The conclusion of one states, “Current heart failure performance measures, aside from prescription of an angiotensin-converting enzyme inhibitor or angiotensin receptor blocker at discharge, have little relationship to patient mortality and combined mortality/rehospitalization in the first 60 to 90 days after discharge” [36]. That report evaluated one of the best-studied sets of parameters and performance measures in our medical system, suggesting that either we do not understand these diseases and their treatments very well or perhaps that other factors compensate for poor performance and mitigate effects on patient outcomes.

The second report states, “Hospital performance measures predict small differences in hospital risk-adjusted mortality rates. Efforts should be made to develop performance measures that are tightly linked to patient outcomes” [37]. Again, the illnesses examined and the performance measures used were some of the most heavily studied in history of the US system, raising a flag that adherence to performance standards may provide marginal improvements at best. I am advocating neither sarcasm nor nihilism in the face of these pressing service and quality issues within our profession. Instead, I am suggesting that we take a scientific and evidence-based approach to P4P and related initiatives.

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Conclusion 

We are living through a revolution in how our society views the profession of medicine. Although the past few years have seen dramatic changes, it is important to understand the long-term factors that are at work and the diverse forces driving change if we are to be prepared for the next wave of change. Our society is raising the bar for us, demanding more transparency about our service, our quality, and our safety. Pay for performance is one attempt to gain greater control over issues of safety, value, cost, and outcomes.

With regard to P4P, we are currently at an early stage of a process that will likely proceed in stages. The CMS measures described above were developed on a consensus basis. Over time, it will be possible to measure the impact of compliance on outcomes, and future P4P efforts will likely evolve in an iterative process as these data become available and then are incorporated into next-generation performance measures. As this occurs, we should advocate for scientifically rigorous attention to these issues at all levels. As some authors have wittily pointed out, the alternatives to evidence-based medicine, such as “eminence-based medicine,” “vehemence-based medicine,” “nervousness-based medicine,” and “confidence-based medicine,” are far worse [38].

The critical issues for us are to recognize that we are living in a time of profound change in how society judges the quality of medical services. As scientifically trained physicians, we should be able to embrace these measures (at least when they are well designed). We should take a more active role in how these performance measures are chosen and analyzed rather than just passively reporting the data requested from us. We should be taking the lead in developing these measures and implementing sound programs that reward good service that leads to better patient outcomes.

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References 

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PII: S1546-1440(07)00571-6

doi:10.1016/j.jacr.2007.09.016

Journal of the American College of Radiology
Volume 5, Issue 3 , Pages 168-173, March 2008

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