Study: Impact of pay-for-performance incentives in ACOs

January 25, 2016

A new study of a pediatric ACO serving approximately 300,000 Medicaid-eligible children in Ohio evaluated whether financial incentives influence physician behavior.

Pay-for-performance (P4P) works in pediatric accountable care organizations (ACOs), according to the results of a new study published in the online first edition of JAMA Pediatrics.

Partners for Kids (PFK), a pediatric ACO serving approximately 300,000 Medicaid-eligible children in Ohio, found that offering financial incentives does influence physician behavior to improve basic health measures, according to lead study author Sean P. Gleeson, MD, Nationwide Children’s Hospital, Columbus, Ohio.

In 1994, Nationwide Children’s Hospital partnered with community pediatricians to create PFK, a physician-hospital organization with governance shared equally between Nationwide Children’s and physician primary and specialty practice groups.

Gleeson

“Within the background of general improvement of quality measures within a pediatric ACO, we found that a physician pay-for-performance program accelerated improvement rates in quality measures, and that close quality improvement support of the practice is even more effective,” Gleeson says.

Gleeson says that effective quality improvement support of the practice can accelerate the improvements even more. “Furthermore, as ACOs become more prevalent contracting partners with managed care companies, the managed care executives can structure the relationship to encourage the use of techniques that accelerate improvement,” he says.

The study found that community physicians receiving P4P incentives achieved moderate but significant improvements in quality measures compared with other community physicians. It also found that hospital-employed primary care physicians who were targeted with non-incentive-based improvement efforts achieved greater performance improvements than community physicians receiving P4P incentives.

A previous study found that PFK has increased value in the healthcare system by reducing cost without negatively impacting quality.

“The healthcare system is placing much greater emphasis on value in healthcare services,” Gleeson says. “All purchasers of healthcare, whether they are managed care plans, employer groups, or government agencies, should focus on those activities that deliver the greatest impact for the money spent. Pay for performance and quality improvement support are two powerful tools used to increase value in healthcare.”

The study findings validate that the work currently underway in healthcare is making a difference for patients, says Gleeson. “Children are getting better care over time, and that is something to celebrate.  Our responsibility as providers and managed care organizations is to do all we can to accelerate those improvements to benefit patients. A pediatric ACO can be effective in engaging the providers within its network to deliver improved quality of care outcomes.”