Grading a Physician’s Value — The Misapplication of Performance Measurement
By Robert A. Berenson, M.D., and Deborah R. Kaye, M.D.
The New England Journal of Medicine, November 28, 2013
Perhaps the only health policy issue on which Republicans and Democrats agree is the need to move from volume-based to value-based payment for health care providers. Rather than paying for activity, the aspirational goal is to pay for outcomes that take into account quality and costs. In keeping with this notion of paying for value rather than volume, the Affordable Care Act (ACA) created the “value-based payment modifier,” or “value modifier,” a pay-for-performance approach for physicians who actively participate in Medicare. By 2017, physicians will be rewarded or penalized on the basis of the relative calculated value of the care they provide to Medicare beneficiaries.
Although we agree that value-based payment is appropriate as a concept, the practical reality is that the Centers for Medicare and Medicaid Services (CMS), despite heroic efforts, cannot accurately measure any physician’s overall value, now or in the foreseeable future.
The value modifier is meant to provide differential payment to a physician or physician group under the Medicare Physician Fee Schedule on the basis of the quality of care furnished as compared with the cost. To reduce the burden on physicians, CMS has based the value modifier on the Physician Quality Reporting System (PQRS).
The meager rate of physician participation in the PQRS suggests that something is fundamentally wrong — physicians simply do not respect the measures, and for good reason. PQRS measures reflect a vanishingly small part of professional activities in most clinical specialties. A handful of such measures can provide a highly misleading snapshot of any physician’s quality. Research shows that performance on specific aspects of care does not predict performance on other components of care. Primary care physicians manage 400 different conditions in a year, and 70 conditions account for 80% of their patient load. Yet a primary care physician currently reports on as few as three PQRS measures.
The challenge of accurately assigning costs to an individual physician is similarly daunting. Current methods for case-mix adjustment do not adequately capture variations in patients’ illness severity, complicating coexisting conditions, or relevant socioeconomic differences — differences beyond the physician’s control that affect the cost of care. And we currently don’t know how to attribute to an individual physician the costs that Medicare beneficiaries generate across the health care system.
Even if we had better measures, behavioral economists would still challenge the pay-for-performance concept, at least for professionals such as physicians and teachers, who must manage complex situations and creatively solve problems. These critics argue that rewarding professionals on the basis of a particular performance measure has the potential to crowd out the intrinsic motivation to perform well across the board, not just on the few activities being measured.
http://www.nejm.org/doi/full/10.1056/NEJMp1312287?query=TOC
Comment:
By Don McCanne, M.D. The “value-based payment modifier” – an adjustment in payments to reward physicians for improving value in the health care they provide, or to punish them for providing lower value – is yet another example of the often misguided measures in the Affordable Care Act allegedly designed to improve our health care system, when, in fact, the fundamental reforms in the health care financing system that we really needed were barely touched upon, in deference to the private insurance industry. It will be difficult to change from a volume-based system (fees based on volume of services provided) to a value-based payment system when we still do not know how to define the value of physician services, as Drs. Berenson and Kaye explain to us in this NEJM article, though they do suggest some other modest measures that might have some benefit. It is fine to continue research on measures that have a potential for improving value in health care, but it is almost criminal to ignore a concept that has already been proven in other nations to dramatically increase value – potentially a far greater increase than all of the other measures combined that are included in the Affordable Care Act. Of course, that concept is single payer financing. Let’s first enact an improved Medicare for all, and then we could tweak the system with measures that might provide incremental improvements in value. But first things first.
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