Blue Cross and Blue Shield

California Blues Plans Say Pay-for-Performance Works, Award $100 Million to Providers

Reprinted from The AIS Report on Blue Cross and Blue Shield Plans, a hard-hitting independent monthly newsletter on business strategies, products and markets, mergers and alliances, and financing of BC/BS plans.

Together, Blue Cross of California and Blue Shield of California awarded more than $100 million in pay-for-performance (P4P) bonuses to providers in 2007. The plans say they are seeing improvements in care that can be attributed to P4P initiatives.

Both plans participate in the Integrated Healthcare Association (IHA) P4P initiative, and both have their own internal metrics for measuring the performance of participating providers. IHA is a California-based not-for-profit organization that coordinates a P4P program with participating health plans and providers. It recently released 2006 provider performance results in the areas of clinical quality, patient experience and information technology (IT). The Blues plans use those results in deciding how much to award providers.

"The reports we get show there's been a steady improvement over the past four years," says Michael Belman, M.D., medical director for clinical quality and innovations at Blue Cross of California. The WellPoint, Inc. subsidiary says it awarded more than $69 million to 176 provider groups for 2006 improvements through its HMO Quality Scorecard program.

Blue Shield of California awarded $14.9 million to providers through IHA, and also made $16.0 million in P4P awards through other channels, spokesperson Erica Perng says in an e-mail. She explains that the plan awarded $6.2 million through the "Performance Improvement Rewards Program," another $6.2 million in bonuses through its "Standard Shared Risk" program, and $3.6 million through other incentives.

California Blue Cross has developed its own performance metrics, in addition to IHA performance metrics, as part its scorecard program, Belman says. There's been improvement in those metrics as well, he says during an interview with The AIS Report. According to Belman, the plan internally scores providers on their efficiency. But for P4P, "We pay…the medical group, who in turn measures [and awards] their own physicians," based on their performance. Provider groups also are starting to offer performance bonuses, he says, adding that there's been a "fourfold increase from 35 to 140 [groups] that distribute internal bonuses" over the past four years.

Provider IT Seen as Most Affected

Perng says P4P affected provider IT the most, with 2006 seeing a 20% increase "in the number of groups qualifying for at least partial IT credit." She adds that 43% of providers now engage in at least four IT activities, and "78% of HMO members are now managed with computer registries." The higher use of IT, she notes, also has a clinical care correlation. Groups that earned full P4P credits for IT had a "19 point higher overall clinical performance.vs. groups that demonstrated no IT capability," Perng says.

However, she contends that it's difficult to determine if the improvement in IT "is a result of P4P or general technology improvements overall, i.e., medical groups improving office efficiencies."

"There is a significant difference in clinical achievements between groups that demonstrate little or no use of IT and those groups that have made a significant commitment to using IT to support patient care," said Steve McDermott, CEO of Hill Physicians Medical Group and an IHA board member. "Pay for performance is proving to be an effective tool for motivating physician groups to invest in IT and to strive for higher levels of clinical performance and patient satisfaction."

"50% of physician groups showed improvement across all clinical measures" last year, says Perng. The improvements, she states, included the screening of 12,000 more women for cervical cancer and 3,000 more immunizations given to children in 2006 than in 2005. She adds that 3,000 people received appropriate diabetes screenings and that 10,000 more with diabetes now have their blood sugar better controlled.

"All clinical measures improved across the board with the exception of upper respiratory infection, which stayed flat," Perng says.

Under P4P programs, patient satisfaction showed "slow improvement,.with patients reporting the most satisfaction overall with their doctor and interaction," according to Perng. The lowest level of satisfaction, she says, was "with getting appointments with specialists, access to care and coordination of care."

Belman says that the plan is very "encouraged" by the improvements the plan has seen provider groups make through the P4P program. "We're confident right now that this is very productive."

But, "in general we all face the problem in the P4P movement in that we have to look for increases that are beyond what providers would already do" to improve care, Belman says. He adds, "We're awaiting a formal evaluation from the RAND Corp.," which was retained to produce a report on the IHA's P4P initiative when it began. He contends that "there aren't many studies comparing groups that participated in P4P programs, versus those that didn't [participate]." And this study will examine what the impact of P4P is for the different groups. "A lot of people are waiting to see that definitive proof," he asserts.

Belman says IHA will expand the set of IT metrics to include the use of clinical records and e-prescribing. He adds that California is starting a hospital P4P initiative through CalHospitalCompare.org, a coalition that includes Blue Cross of California, Blue Shield of California, California HealthCare Foundation, the University of California at San Francisco Institute for Health Policy Studies, and the California Hospitals Assessment and Reporting Taskforce.

Advertise With AIS

Privacy

Site Map