post by Bill Gardner
Pay for performance is a scheme in which health care provider reimbursement is tied to meeting health care quality standards. In the US, I work for a children's hospital that has formed a large regional accountable care organization (ACO, very roughly, a scheme for organizing care that ties reimbursement to meeting quality goals for a defined population). The ACO is currently negotiating an alliance with similar systems caring for contiguous regions, in an effort to gain the organizational scale necessary to successfully implement ACO initiatives.
In many ways, the Canadian children's health care organization I work for is ahead of the US. It already cares for a defined population. Each child has a permanent health care identifier, every child is covered, and the province is the only payer that matters, so regional health care data are not divided into the silos of competing insurers. In short, we have the Care Organization. What's missing is the Accountability.
I don't mean that providers in our province are negligent. What I mean is that despite our public commitment to population health goals, and lots of long committee meetings about it, providers are unlikely to be held to measurable performance targets. Pay for performance is not much used in Canada. So, the incentive structure is much like the Dilbert cartoon -- trying to do a better job just means more work -- except that the hospital CEO will never see a bonus. This means that health care compensation is, by my lights, fairer in Canada than the US. But so far at least, I also see less effort at innovation. Keep in mind that I only see Atlantic Canadian care, things may be different in Manitoba.
So why is accountable care lagging in Atlantic Canada? Part of it may be the difference between the US and Canadian organizational cultures. But the more important factor is scale. The Province of Nova Scotia has about the same population as, say, metropolitan San Jose (in the land area of West Virginia -- and NS is one of the densely populated provinces). Imagine San Jose trying to mount the data and analytic infrastructure to run a single payer health plan and then guide care using research. To move to accountable care, Canada needs to build a federal infrastructure for health data and comparative effectiveness research.
The scary thing is that, so far, there is little evidence that pay for performance actually works. It's up to those of us working on ACOs to change that.
thanks to Tim Harford for the link to Dilbert.