A one paragraph definition/description of Pay for Performance.

Address the following as it pertains to Pay for Performance:

A one paragraph definition/description of Pay for Performance.
How pay for performance might change the way health care leaders manage their organizations.

What actions health care administrators should take to better prepare for this trend?

How consumer-directed health care fits with Pay for Performance?

 

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1. A one paragraph definition/description of Pay for Performance.

Pay for performance (P4P) in the health care arena is intended to improve the management of patient outcomes. It generally is defined as providers’ supplying data on specified quality measures and purchasers’ paying for health services differentially based on the outcomes resulting from those preset measures (http://www.deloitte.com/dtt/cda/doc/content/us_chs_p4p_032806%281%29.pdf).

This “payment model rewards physicians, hospitals, medical groups, and other healthcare providers for meeting certain performance measures for quality and efficiency. Disincentives, such as eliminating payments for negative consequences of care (medical errors) or increased costs, have also been proposed. In the developed nations, the rapidly aging population and rising health care costs have recently brought P4P to the forefront of health policy discussions. Pilot studies underway in several large healthcare systems have shown modest improvements in specific outcomes and increased efficiency, but no cost savings due to added administrative requirements. Statements by professional medical societies generally support incentive programs to increase the quality of health care, but express concern with the validity of quality indicators, patient and physician autonomy and privacy, and increased administrative burdens” (http://en.wikipedia.org/wiki/Pay_for_performance_%28healthcare%29)

2. How does pay for performance might change the way health care leaders manage their organizations?

To be successful, certain changes might need to occur. In order to help improve the quality of care, for example, leaders must align the P4P’s goals of medical professionalism. Added ethical issues need consideration. Avoid initiatives that provide incentives for a few specific elements of a single disease or condition, however, may neglect the complexity of care for the whole patient, especially the elderly patient with multiple chronic conditions. Such programs could also result in the deselection of patients, “playing to the measures” rather than focusing on the patient as a who

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