P4P: Not Another Videogame System

Under our current health care system physician reimbursement is calculated under a fee-for-service system. Insurers decide how much they will pay for each visit, each test, and each procedure. The doctor then files for payment using codes for each charge.

Sounds simple but, like most things in life, it's quite complicated. Think about this: the physician is paid whether or not the patient improves or survives. The physician is paid even if the patient makes no effort to improve their health by losing weight or stopping smoking.

There is growing interest in P4P, an abbreviation for Pay-for-Performance. Instead of simply fixing broken bodies, doctors should be rewarded for improving health care, offering preventive services, and streamlining the delivery of services.

Some private insurers have begun implementing P4P but it's still too early to determine its impact. Some health policymakers want Medicare to incrementally switch to a P4P system. According to a recent report from the Institute of Medicine:

Improving quality of care has become a top priority for all stakeholders in the health care system. Performance measures are benchmarks by which health care providers and organizations can determine their success in delivering care - for example, regular blood and urine tests for diabetic patients, a facility's 30-day survival rate among cardiac bypass patients, or perceptions of care collected from patient surveys. The current system pays for treating injury and illness - and encourages use of new, high-tech interventions - but it does not generally reimburse for preventive services such as patient education. Nor does it pay for coordinating the care of patients whose conditions involve multiple providers, and it offers no incentives to improve patients' overall health status.

What would P4P mean for you? The most immediate benefits would likely include better access to your doctor, improved patient education, more preventive care, and better access (at least to your insurer) to individual ophthalmologist's surgery outcome data.

Nothing happens quickly, but when it comes to improving our health care system the P4P glacier is definitely picking up speed!

Related Topics: Old-Fashioned Medicine Back Again, Feds Launch Hospital Quality Comparisons, U.S. Health Care: Pay More, Get Less?

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