Healthcare Efficiency

Pay for Performance (P4P)is the new poster child for curing healthcare.  The Institute of Medicine just released a report on this concept and concludes that if you pay people for doing something, they will, indeed, do it.  And even physicians are susceptible to this strategy.  This is not new to the quality world, but it is novel in healthcare.  The business equivalent would be supply chain management or supplier certification.  If you want to be a first tier supplier for company A, you must meet their tier one standards.  In healthcare, however, the AMA has long championed the concept of “any willing provider” and resisted attempts to exclude or limit any provider;s access to any market.  Their position paper on P4P reflects this bias and limits application of supplier management concepts to healthcare.

The IOM report does not mention cost of services or efficiency of either systems or individual services.  They do take a jab at fee-for-service payment (“...require a transformation away from fee-for-service payments....”), and argue that fee-for-service rewards excessive use of services.  It’s not clear, however, who gets to define “excessive” or how this leads to “lower quality care.”  Their argument seems intuitively true, but clear indications for surgery counteract this effect, as demonstrated, for example, with cataract surgery.
 
P4P is an important tool that will become more common.  The real trick is defining “performance” and recognizing that P4P will not solve all problems.  It will do nothing for cost, or efficiency, or access, or coordination of care.  It should not be expected to do so.  Use a hammer to pound the nail, then pick up a screwdriver.