Medicare and commercial health insurance payment to doctors and hospitals soon may be linked in part to measurable factors that are intended to indicate healthcare quality and efficiency. Where these indicators come from, how complicated and costly they are to measure, how accurately they reflect quality, and what relationship they have to the actual value of healthcare are questions yet to be answered, particularly for neurosurgeons.
The so-called pay-for-performance topic has surfaced in the turbulent sea of controversial federal medical-political issues in the form of the Medicare Payment Advisory Commission’s March 2005 report recommending adoption of pay-for-performance criteria in the Medicare program. MedPAC’s advice to Congress is no vague speculation and no idle threat: To pay for the initiative, MedPAC recommended withholding 2 percent from all Medicare fees and further, increasing the money diverted to quality payment over subsequent years. The withheld funds are to be redistributed to doctors in specialties that choose to participate by developing quality outcome criteria that is approved by Medicare. Doctors in specialties that do not participate would see their Medicare reimbursement reduced by 2 percent, and they would not be eligible for the “quality” payment incentives that could offset the loss. Pay for performance may be coercion, but it is likely to be future legislation, and for Medicare providers, participation isn’t optional.
The pay-for-performance policy can be traced to Avedis Donabedian, a physician and pioneer in healthcare quality research, who in the 1960s published a model for quality assessment that included structure, process and outcomes. In 1973, John E. Wennberg began a series of studies, published in Science magazine, showing that regional variation in healthcare produced no difference in health quality or outcome, but did produce significant variation in cost and resource use. The implication was that quality can be defined, measured, and rewarded. The quality movement gained momentum in the 1980s and 1990s, becoming the subject of numerous Institute of Medicine studies. These studies are strongly influential in directing MedPAC recommendations, Congressional actions, and Medicare payment regulations that define quality criteria and reward quality performance in healthcare.
The Bulletin’s cover story addresses quality in neurosurgical practice. It is a timely topic of importance to every neurosurgeon. In “Variations Revisited,” the Health Affairs Web Exclusive of Oct. 7, 2004, editor John Iglehart wrote that “…the critical importance of creating economic incentives to reward providers who reduce unwarranted variation and the need for Medicare to assume greater leadership are increasingly recognized by payers and Congress alike.” This declaration is a warning, not a suggestion, to be heeded by all specialties.
Five Types of Assessment Criteria
There are five general types of criteria for assessment of healthcare outcomes. The hardest to measure is the most accurate and the least likely to be used: objective, evidence-based health benefits of treatment. The others are less accurate, but more practical because they are measurable, such as processes of care (did physical therapy precede lumbar disc surgery?), structural measures (board certification), efficiency measures (length of hospital stay), and patient satisfaction surveys. When accuracy conflicts with practicality as in this case, practicality wins; the indirect or proxy measurements will be used, regardless of whether better health outcomes will result.
According to the MedPAC recommendations, specialties are encouraged to develop outcome criteria in four of the five categories, and to select both the conditions and the measures by which they want to be rated. Based on published evidence, the selected criteria are to relate to higher quality outcomes. The selected data sets, termed “Evidenced-Based Performance Standards for ICD-9 Classifications,” would be approved through a process involving first the American Medical Association’s Physician Consortium for Performance Improvement, then the National Quality Forum, and finally the Centers for Medicare and Medicaid Services.
Specialties should be cautious in selecting outcome criteria. Werner and Asch warn in the March 9 Journal of the American Medical Association that healthcare “report cards” can have the unintended effect of driving physicians to avoid complicated cases, conform to guidelines even if inappropriate in individual cases, and ignore patient preference and clinical judgment.
Historically, medical care was assumed to be equivalent among physicians, based on professional qualifications, and professional judgment was the standard measure of appropriateness. Quality research has disproved the first assumption, and public accountability has displaced the second. Neurosurgery is faced with a choice: either protest and oppose pay for performance because of its inaccuracy and ignore the payment penalties, or accept the initiative’s inherent contradictions and develop credible performance criteria that can be used to judge the quality of neurosurgical practice.
James R. Bean, MD, is editor of the Bulletin and the AANS treasurer. He is in private practice in Lexington, Ky.