P4P rewards: Paul Brough removes disconnects between more pay and better performance

April 1, 2007

Virtually everyone agrees that properly incentivizing physicians-particularly rewarding the high-level performers-is critical to changing the direction of the U.S. healthcare industry. No single stakeholder can effect much of a change alone, however; if the industry is going to change, it will be with help from every direction and demographic.

And that change should start with providers at the point of service, according to Paul Brough, who has spent the last seven years as executive director of the Hyannis, Mass.-based Physicians of Cape Cod. Previously, Brough had managed care experience in launching two organizations: Health Net Inc., now the largest physician and hospital owned managed care network in Maine; and Yale Preferred Health Inc., an HMO that achieved significant growth under his leadership.

Comprising approximately 325 primary care and specialist physicians, Physicians of Cape Cod, an independent practice association, manages insurance risk against an overall medical budget. Through the use of Web-based referral technology, implemented in 2002, the medical directors funnel care to the appropriate settings, emphasizing high-quality care and cost efficiency. An internal point system for physician behavior has been the basis for its pay-for-performance system, which has awarded $7.2 million in the past two years alone.

A. The performance guideline criteria are divided into two categories-participation measures and system measures. Participation measures include items such as meeting attendance, while the system measures include quality measures and the use of technology. Physician members who aren't within the top 75% of the overall point scale, as measured against their peers, are not eligible for distributions.

Q. How have Physicians of Cape Cod's Web-based referral and point system initiatives panned out so far?

A. Technology is supposed to make things easier, but in healthcare, that hasn't always been the case. Physicians deal with a lot of payers, and each of them have a different Web site that the staff has to log into and out of. We created an online one-stop shop in which we've already loaded eligibility and referrals. That doesn't just help with outside communication, it helps on the inside as well. There are a lot more discussions about an individual's quality of care than patients know about, and our system makes it easier for medical directors, PCPs and specialists to communicate about a patient online through notes.

Our physicians have received 100% of their withhold return every year without fail. Since instituting the performance guideline point system five years ago, the organization has returned a total of $10.8 million in bonus money to the physicians since 2001. More than two thirds of that amount-about $7.2 million-was returned in the past two years alone, and the trend is expected to continue. The company's numbers for 2006 are proving to be the most robust ever, due to the preferred provider enhancement to the point system, which has more deeply engaged physicians in the company-as demonstrated by the membership attendance at organizational meetings, which has reached an all-time high. The combination of our technology, point system, and preferred provider program has proven to be an unqualified success for Physicians of Cape Cod and our partners.

Q. Has there always been such a pressing need for P4P programs, or is it something that has developed in recent years?

A. It has always been a challenge to motivate physicians to act as a group rather than individual doctors, because individuality is part of their makeup. By nature, doctors are independent thinkers, accustomed to performing a service and getting a fee for it. In their minds, they have always been working on a pay-for-performance model, so the catch is getting them to think outside their own walls. That's a challenge, even for a group that is owned by physicians. The need is more obvious now, though, because the inefficiencies are being examined at a very high, public level.