By Thomas Lee
To improve healthcare in Minnesota, the state is now offering providers a little more than the proverbial pat on the back.
Earlier this month, Minnesota health officials launched an incentive-based payment system for hospitals and ambulatory firms who treat patients enrolled in the state’s health insurance programs.
Providers who compare favorably to benchmarks measuring the quality of diabetes, heart disease, and pneumonia care and who improve over time will receive extra money. The program is the first step of an ambitious healthcare reform law, passed in 2008, that will eventually allow consumers to compare the cost and performance of all providers in Minnesota, a process known as peer grouping.
“Consumers need to get better value for their money,” said Minnesota Department of Health commissioner Dr. Sanne Magnan. Spending “more money is not always better.”
Experts blame the soaring costs of healthcare in the United States on Medicare’s fee-for-service reimbursement system in which providers receive more money if they perform more care, regardless of medical outcomes. Over the past several years, several so-called pay-for-performance (P4P) programs have sprouted around the country, an attempt to reward providers for quality, not volume.
“The issue of tying provider payments to quality outcomes is no longer a theoretical phenomenon, but a growing and significant aspect of the health care delivery system,” according to a report by Deloitte Consulting. “Mounting evidence from demonstrations and studies suggests payment to providers for quality information and data has been shown to significantly improve the health care indicators being measured in well-designed P4P projects.”
Minnesota’s programs are some of the most ambitious since they will create a uniform way to measure and compare the cost and quality of service from providers throughout the state. The incentive system will initially focus on care relating to diabetes and heart failure before eventually expanding to depression and patient experience.
Dr. Magnan insisted the idea was not to punish providers but to reward good care and encourage improvement.
“People always want to know your motivation,” she said. “Why are you doing this. It’s not about searching for bad apples. It’s not about gotcha. We’re trying to accomplish the triple aim of improving population health, consumer experience, and affordability and to do that, you have to measure whether you are making progress. Do people know the road stops along the way? How are we going to get there?”
However, P4P and peer grouping has traditionally made doctors and hospitals nervous. They fear losing money and customers based on arbitrary standards. For example, Minnesota law eventually requires health plans and government agencies to steer consumers towards providers who rank favorably in peer grouping. So there will inevitably be winners and losers.
During the last legislative session, the Minnesota Medical Association (MMA) successfully pushed for delays to peer grouping. The group argued providers needed more time to digest the data and criticized the state’s metrics as not accurately measuring a doctor’s performance.
“The data the state is collecting could be a powerful tool for improving care but the state’s current approach has an unrealistic timeline and is based on untested methods that could result in unintended, negative consequences," said MMA President Dr. Benjamin Whitten. “Given the unknowns about the data’s quality, the MMA is urging the state to slow down, abandon the punitive approach, and use the data in ways we know works’ for quality improvement.”
Under the revised law, the state will now publish its general peer grouping data in January 2011 and disease-specific data on March 2011. Prior to publication, providers can examine their data and appeal their rankings. The law also repealed a provision that prohibited providers who scored in the bottom 10 percent of quality and cost measures from treating patients enrolled in state insurance plans.
Speaking at the Innovations in Diabetes Summit last week, Dr. Victor Montori, a professor of medicine at Mayo Clinic, said P4P and peer grouping will inevitably push providers to meet desired outcomes that aren’t necessarily equal to good patient care, much like teachers preparing students solely to pass a standardized test.
Montori argues for “minimally disruptive medicine,” in which doctors design treatment that suits the patient’s schedule and lifestyle rather than the other way around. Instead of using data like cholesterol levels and blood pressure to measure care, doctors should focus on patient goals like living longer and feeling better, he said.
With incentive payments, “patient care collides with disease treatment standards,” Dr. Montori said. “Initially, it’s practical to focus on things we can quantify. But where is the moral fabric of healthcare?"