During medical school, I learned about randomized clinical trials. Every experimental drug went through three types of clinical trials before approval. There were Phase I clinical trials which tested for toxicity and dosing. Phase II trials then examined optimal dosing and efficacy. Finally, Phase III trials compared the efficacy of the new drug with the current “gold standard” treatment.  I’m now learning that health care policy doesn’t always undergo the same kind of rigorous study.  I met up recently with a friend who is a primary care physician. His practice has just signed a contract with the state’s largest insurer that reimburses not according to the traditional fee-for-service, which pays doctors a set price for each visit, test or procedure they do, but according to a newer standard known as “pay-for-performance.” The insurance company will give his practice a budget for each patient; the doctors in the practice can earn more by cutting costs and by meeting certain quality goals, like controlling blood sugar or high blood pressure in patients.  I asked my friend if he was happy about the new contract.  “I guess so,” he replied with some hesitation. “I’m not sure how else we are going to stop spiraling health care costs.” But then he added, “I do worry about how this will affect my relationship with patients. If my patient comes in with a headache and wants a CAT scan, but I don’t order it because I think it’s not medically indicated, will that patient think I’m just trying to save money?”  I thought about his concerns, and at first could not see any downside to linking quality to financial incentives. When doctors are working on a fee-for-service plan, there’s just not that much incentive for them to take time to promote healthy living or strong doctor-patient relationships; the payment system rewards for high turnover and pits doctors against the clock.  I knew that other industries, like business corporations and education, had successfully used pay-for-performance to improve quality. And health care quality, which is a secondary concern with fee-for-service incentives, could definitely use a boost. A 2003 New England Journal of Medicine study showed that only about half of patients received the standard, nationally recognized care for preventive health issues and acute and chronic conditions.  I felt, too, that my own area of training, liver transplantation, could benefit from linking financial incentives to quality, not quantity. A surgeon must, for example, weigh the relative importance of multiple, sometimes counterbalancing factors when deciding to accept a donor liver for a waiting patient. Will the donor liver be too big or too small for the patient? Is the donor liver cirrhotic or too fatty or too old? Is the recipient too sick to receive this particular organ or able to accept the risk of waiting for the next one?  These are vital questions, because they help liver transplant surgeons avoid some of the worst complications of transplantation — body-wide infections, bleeding so profuse that staff cannot change the bed sheets quickly enough, and a coma so deep that it can only end in death.  Yet every liver transplant surgeon has seen these devastating complications. And as multiple studies have shown, despite a surgeon’s best predictions, from 5 to 10 percent of all transplanted livers will not work for reasons that none of us know or understand.  Nonetheless, in a fee-for-service payment system that reimburses hospitals anywhere from $400,000 to $500,000 per liver transplant, it’s hard not to suspect less-than-savory intentions from any surgeon or hospital with high transplant numbers and consistently more complications than the accepted norms. Last fall, in a piece titled “Doing a Volume Business in Liver Transplants,” The Wall Street Journal reported on one such case involving a surgeon hired six years ago by the University of Pittsburgh Medical Center. Allegations against this surgeon and the medical center include using questionable donor livers in relatively healthy patients in order to increase the number of transplants performed.  I could not help but think that if the medical center’s reimbursement had been based on pay-for performance — and had been subject to the inherent quality checks and transparency of such a plan — perhaps fewer patients and families would have been so terribly affected for so long. And perhaps the disastrous repercussions on trust between potential liver transplant patients and their surgeons in the wake of this case would have been averted.  Still, I wondered how pay-for-performance might affect the doctor-patient relationship in daily interactions, as my primary care doctor friend mentioned. He is one of the best clinicians I know, a devoted patient advocate.  So I began searching for clinical trials on pay-for-performance plans. In this era of evidence-based medicine, I was certain I would find plenty of well-designed studies focusing on cost, quality and the doctor-patient relationship.  What I found was this: waves of new pay-for-performance payment plans across the country, a relatively modest number of articles on the subject and, most disturbingly, very few high quality studies on efficacy. Looking for a few good studies, it turned out, was like searching for a needle in a massive haystack of social experimentation.  But what an impressive haystack. Since early this decade, an ever-increasing number of employer groups and health plans have chosen to adopt pay-for-performance initiatives. For example, more than half of the private sector health maintenance organizations (H.M.O.’s) now have pay-for-performance programs. California adopted a voluntary pay-for-performance program in 2003 and now has the largest such program in the country, involving 225 participating physician organizations, some 35,000 physicians and over 6 million state residents. And in the Deficit Reduction Act of 2005, Congress mandated that the Center for Medicare and Medicaid Services adopt a pay-for-performance plan into Medicare.  The details of these myriad plans vary. Reimbursements and bonuses can be based on the work of, and thus are paid to, individual doctors, groups of doctors, or groups of providers who are part of a “medical home.” Some plans, such as HealthPartners in Minnesota, refuse to pay for so-called “never events,” rare and preventable complications like giving a mismatched blood transfusion, making a major medication error or operating on the wrong body part. Other plans transfer the responsibility for traditional insurance risks such as unknown genetics, unpredictable events or simply bad luck away from insurance companies and over to doctors. Still others, such as the Prometheus Payment model now being tested in four communities across the United States, attempt to make doctors responsible for only the risks they can control with high quality care by adjusting payments to reflect that risk alone.  But in this profusion of programs, I found it nearly impossible to find the kind of randomized control study I have come to trust when evaluating experimental drugs or even new devices or surgical therapy. And the few studies that have been published are only mixed or guardedly positive in their conclusions regarding pay-for-performance plans. Only one study has focused on cost-effectiveness.  Even more concerning, however, are the unintended consequences that some of these studies have uncovered. Some pay-for-performance plans have resulted in increased administrative costs. Certain physicians and hospitals have found ways to “work” the system, avoiding patients who require more costly care or who skew quality records and exaggerating the severity of patient status in order to document the kind of dramatic improvement that might result in a bonus.  And none of the studies focused on the effect of pay-for-performance on the relationship between patients and their doctors.
Paying doctors for performance, rather than volume, may help cut spiraling health costs, but how will it affect doctor-patient relations?