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Pay for Performance Could Hurt Docs Who Serve Poor, Blacks and Hispanics

by Brendon Nafziger, DOTmed News Associate Editor | May 06, 2010

"The pay-for-performance specifications blew up those actual performance differences into larger dollar differences than you might expect," Mark Friedberg, associate natural scientist at RAND and lead author of the study, told DOTmed News. That's because "even if all providers are within a four percentage point difference, there's still going to be a ranking of one to a hundred" in a competitive payment scheme, he said.

The simulation couldn't look at why these differences came about, although Friedberg speculates that doctors in poorer communities might have fewer resources to devote to efforts like reminding patients to get yearly exams, and that patients in those areas might have a tougher time finding a high-quality provider.

And while poorer patients are often unhealthier, the study investigated process measures, not health outcomes, so Friedberg isn't convinced that patient demographics were the culprit.

"I think you can make a more justifiable case that patient characteristics cause differences for outcomes, but it's hard to make that case with processes of care," he said.

But there were some limitations. The study only investigated patients on health plans, as the RAND researchers didn't have access to data for uninsured patients or those on Medicaid or Medicare, all of whom could be vastly poorer than the patients included in the study and have even worse access to good providers, resulting in more dramatic disparities than those presented here.

"We're looking at a really truncated spectrum of the sociodemographic distribution," acknowledged Friedberg. "If you were to include patients on Medicaid in a pay-for-performance system that also includes commercial patients, you might see bigger effects than what we saw."

Friedberg pointed out that similar results were seen in the UK, where a pay-for-performance scheme was implemented through the National Health Service. Doctors practicing in neighborhoods with ethnic minorities suffered during the first year of the program, earning much smaller incentive payments, Friedberg said. Interestingly, these differences all but vanished after that first year of the project, according to Friedberg, possibly because unlike the plan modeled in the current study, the British program was noncompetitive -- British doctors were simply rewarded for meeting certain performance thresholds, and not according to their performance-based rank in the system.


While Friedberg believes matching payments to performance could encourage better patient care, he wants to see it balanced by programs that make it still attractive for good doctors to serve vulnerable populations. He suggests offering grants to physicians in poor areas to make up for the difference in the pay-for-performance scheme, or rewarding practices for how much they improve in performance each year, in addition to achieving high scores.