A statewide project in California is now one of the largest and most successful pay-for-performance programs in the country. But if you had taken bets on that success a few years ago, you wouldn’t have found many takers.

Resistance to the program was strong back then when various stakeholders struggled to pull it together.

Health plans in California were reluctant to join the program until its organizers called a make-or-break meeting and representatives of each plan had an opportunity to publicly commit. Histories of the project recount a raucous meeting in which suspicious leaders of physician groups almost wrecked the program.

Even now, five years later, not everything is going smoothly. But as time passes and the health plans and physicians involved begin to see positive results, resistance has mostly turned to support.

“There’s an evaluation of the program going on, and the initial results seem to be favorable and supportive,” said Tom Williams, executive director of the Integrated Healthcare Association (IHA), which manages the program. “Generally, it’s one of those neat situations where more seemed to go right than wrong.”

A national model
Confidence is high enough that the program’s leaders are touting it as a model for similar projects elsewhere, perhaps even for a national pay-for-performance program, such as the one that has been suggested for Medicare.

“Though California is a unique market in many ways, much of what we have accomplished can be adapted in other communities,” said Jenni Vargas, IHA’s board chairwoman.

The idea for a quality-based incentive plan existed before the launch of the current project in 2002. However, that idea derailed when the backlash to the managed care movement hit in the late 1990s.

Despite that backlash, the idea continued to circulate, Williams said. The program began to come together when IHA was asked to be its coordinator and began to build consensus among stakeholders under the leadership of then-board chairman Steve McDermott. McDermott is an avid supporter of pay for performance and the use of IT for boosting the quality of health care.

Unified metrics
The backers’ intent was to forge an incentive plan based on a single set of performance metrics that everyone involved agreed to. The plan also calls for a single public report card that consumers could use to accurately compare the health care delivered by various physician groups.

The primary goal of the program is “to significantly improve physician group performance in quality of health care and patient experience through public recognition and financial reward.” The foundation of that goal is a pragmatic and tough measurement set that steadily intensifies over time.

The first element, or domain, of that set measures clinical quality. During the first year, it called for groups to measure and report on a list of six services they were expected to provide. The services ranged from childhood immunizations and cervical cancer screenings to cholesterol screenings.

The second domain of the measurement set covers the patient experience, such as whether the groups provide timely access to care, an adequate level of doctor/patient communication and quality of care coordination.

The third domain sets the California project apart. Instead of simply promoting the use of IT as an incidental part of the program, the IHA-led initiative makes IT part of the measurement set. Physician groups get grades — and dollar rewards — for investing in IT systems, such as clinical data integration and decision-support tools.

Each domain in the measurement set has a relative weight, and the physician groups’ performance in each domain determines the amount of incentive payments they receive.

Initially, the relative weights were 50 percent for the clinical domain, 40 percent for patient experience, and 10 percent to IT. However, IHA considered technology important enough to the idea of quality improvement that it bumped up the IT domain weighting to 20 percent after the first year, with the patient experience measurement dropping to 30 percent.

“There are various schools of thought about whether to base a pay-for-performance program only on electronic collection of data or on both electronic and paper-based collection,” Williams said. “We made the decision to only collect electronic data, and then we had to do something to help the physician groups to do that.”

Pay for performance is based on a rationale of quality improvement that applies to many different fields of business, he said, and that involves equal focus on process, outcome and structure. “IT is structure,” Williams said. “So we felt we had to support all three legs” of the theory.

Looking ahead
The scope of IT in the California initiative is set to expand with the 2007 measurement year into what — for now, at least — is called the “Systemness Domain.” Proposals for the new measures were released for comment in September 2006.

The idea is to reward groups that enable their physicians to build systematic processes that affect the care they provide to all of their patients, and IT will be a major catalyst for those processes.

As a result, in addition to data integration and decision-support tools, the new domain will include a measure called care management. That measure’s elements are coordination of a patient’s care among all health practitioners, chronic care management and continuity of care.

Those measures will require some level of IT use. And that’s by design, according to the Systemness Domain proposals. Those proposals stress that research and practical experience show that improvements in the process of health care rely on the use of IT and aren’t possible with systems that use only paper records.

Williams said that with all the emphasis now on IT, it’s ironic that if the first plans for the California program had come to pass, technology would no longer be part of the performance measures. The idea was for IT to go away after the first two or three years.

“But the reality is that the IT capabilities needed just to collect the data are huge,” he said. “We can’t do without it now.” - www.govhealthit.com