Pay-for-Performance Plans Now Common Among HMOs

WEDNESDAY, Nov. 1, 2006 (HealthDay News) -- So-called "pay-for-performance" health plans are now common among commercial HMOs in the United States, according to a Harvard School of Public Health study.

These plans, which pay health providers based on quality and cost measures, have become a hot topic of discussion in recent years. The U.S. Centers for Medicare and Medicaid Services (CMS) is currently considering adopting pay-for-performance for doctors and health plans.

This study, the first of its kind, found that 52.1 percent of health plans representing 81.3 percent of people enrolled in HMOs used pay-for-performance programs in 2005.

"This is the only national estimate we have of pay-for-performance, and thus, the best information on current models for private health plans and agencies such as Medicare as they move toward adoption of pay-for-performance," study lead author Meredith Rosenthal, associate professor of health economics, said in a prepared statement.

She and her colleagues surveyed 242 health plans offering commercial HMO products. Along with providing information about the prevalence of pay-for-performance programs, the study also found:

• Physician pay-for performance programs were more common than hospital pay-for-performance programs.
• Among physician pay-for-performance programs, nearly all included measures of clinical care quality. The most common clinical care indicators included asthma medication, diabetes care and mammography. Such indicators reflect the appropriate provision of care that has been shown to be effective in maintaining health and preventing illness.
• About a third of physician-oriented incentive programs rewarded only the top-rated physicians or groups and not those who improved the most.
• Health plans in the South were less likely to use pay-for-performance plans.

The researchers said the findings, published in the Nov. 2 issue of the New England Journal of Medicine, may prove to be a useful resource for CMS as it considers pay-for-performance programs for Medicare.

"Our data show that pay-for-performance has become a widespread phenomenon in the HMO sector. As the design of Medicare pay-for-performance moves forward, this national snapshot of commercial payers' programs provides both a template and context for Medicare's own efforts," Rosenthal said.

More information

The American Academy of Family Physicians has more about health insurance.