All eyes appear to be on the California IPA plans to see if the procedures for P4P brings about the win-win of saving money along with better health care.  Thus far as the article indicates the evidence doesn't indicate any real savings, thus the jury on P4P is still out.  BD

The pay-for-performance program of California's Integrated Healthcare Association—the largest, most successful P4P program in the country—was founded on the premise that paying physician groups and IPAs extra for meeting certain quality targets could improve the overall quality of healthcare. Payers bought into this idea, and were willing to fork over roughly $50 million a year to the physician groups, partly because they believed that better quality would eventually save them money.

So far, however, there's no evidence that P4P has saved money in California. And, as healthcare spending continues to soar, employers and health plans are seeking a way to obtain those savings more directly. As a result, the IHA recently announced that it would test a number of efficiency measures that may someday count toward determining whether physician organizations receive P4P rewards.

While this is occurring only in California, it parallels health plan programs elsewhere that use efficiency measures to "tier" physicians by placing the less costly ones in preferred networks. (See "What 'tiered networks' will mean to you," Sept. 17, 2004). Moreover, the IHA pay-for-performance program has helped spur the national movement toward "value-based purchasing" by CMS and private payers. So what happens in California over the next year or two could be a turning point in pay for performance and could indicate how physicians all across the country will be reimbursed in the future.

Is P4P getting tougher? - A California P4P program's experiment may be the beginning of a national trend. - Medical Economics


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