Medicare and P4P

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Medicare and P4P
David B. Nash, MD, MBA

    t has not resulted in much fanfare yet,       • encourage the most rapid, feasible           formance data to ensure that the informa-
    but I am sure that it will. I am speak-         per formance improvement by all              tion pertaining to their performance is
    ing of the latest report from the Insti-        health care providers.                       transparent and is made public so that it
tute of Medicine (IOM) in its series              • support innovation and constructive          is meaningful and understandable to
called “Pathways to Quality Health Care.”           change throughout the health care            consumers. The repor t also recom-
The most recent report is called Reward-            system.                                      mends that all Medicare providers sub-
ing Provider Performance: Aligning Incen-         • promote better outcomes of care, espe-       mit performance measures for public
tives in Medicare.1                                 cially through coordination of care for      reporting and that they participate in a
   First, I’d like to summarize some of             all providers and at all times.              P4P program as soon as possible.
the main messages in the new IOM                                                                    Although the IOM recognizes that the
report and give our readers a sense of its           The IOM calls for an initial phased         initial measurement requirements might
potential impact on P&T committees                approach to implement this P4P pro-            be narrow, it understands that the pace
nationwide. In 1970, the National Acad-           gram. Specifically, the organization rec-      of expanding the measurement sets
emy of Sciences established the IOM in            ommends that Congress derive initial           needs to be sensitive to the operational
order to:                                         funding (over the next three to five           challenges faced by health care pro-
                                                  years) for a P4P program in Medicare           viders who work in many different kinds
  secure the services of eminent members of       largely from existing funds and that it        of practice settings. That is why the IOM
  appropriate professions in the examination      create provider-specific pools from a re-      is requesting an implementation period
  of policy matters pertaining to the health of   duction in base Medicare payments for          of three to five years starting immedi-
  the public. The Institute acts under the        each class of providers. These would in-       ately.
  responsibility given to the National Acad-      clude hospitals, skilled nursing facilities,      Once again, this is an extraordinary
  emy of Sciences by its congressional            Medicare advantage plans, dialysis facil-      challenge for every P&T committee in
  charter to be an advisor to the federal         ities, home health agencies, and physi-        almost every hospital that treats Medi-
  government and upon its own initiative to       cians. In essence, the IOM is suggesting       care patients.
  identify issues of medical care, research,      that we implement a Medicare-wide P4P             Are you ready to monitor the quality
  and education.2                                 program by reducing the monies we              and safety of medical care in your insti-
                                                  currently pay to everyone throughout           tution more effectively and efficiently?
You can read more about the IOM at its            the system!                                       Do you have the appropriate personnel
Web site,                The IOM goes on to recommend that           currently on the team ready to meet such
   Of course, it was the IOM that nearly          Congress give the Department of Health         potential challenges posed by the IOM?
six years ago brought us the famous and           and Human Ser vices the authority to              It has been more that five years since
important report, Crossing the Quality            aggregate the pools for different care         the publication of Crossing the Quality
Chasm.3 This 2001 report outlined the             settings into one consolidated pool. From      Chasm. Although progress is being
critical quality deficiencies in the health       this single pool, all providers would be       made, it is painfully slow, as we try to
care system and was generally regarded            rewarded when the development of new           create the patient-centered, transparent,
as the follow-up report to the infamous           performance measures allows for shared         effective, and timely health care system
To Err is Human, first published in 1999.4        accountability and more coordinated            of the future.
Most P&T committee members by now,                care for all health care provider settings.       P&T committees will play a critical
I hope, are familiar with both of these           If this were to occur, it would represent      role in this transformation. I sense that
reports.                                          a dramatic change in the overarching           the leadership at the IOM—and within
   This current report, Rewarding Pro-            structure and function of the reimburse-       the CMS—is becoming impatient with
vider Performance,1 I believe, is a water-        ment activities for the Centers for            the pace of reform. It is our responsibil-
shed event in the history of the Medicare         Medicare & Medicaid Services (CMS).            ity not only to monitor the work of the
program. It recommends a national                    The experts who formed the panel of         IOM but also to be prepared to enact the
design and implementation of a pay-for-           authors of this report are intelligent; they   inevitable reforms necessary.
per formance (P4P) program for the                know that this is a huge political battle,        Readers can review the entire IOM
entire Medicare system. The IOM                   one that demands complete transforma-          report at the National Academies Press’
believes that paying health care pro-             tion of the payment procedures for the         Web site (
viders for higher-quality care, as meas-          CMS. However, other aspects of the             11723.html).
ured by selected standards and pro-               report are equally challenging.                   As usual, I am interested in your views.
cedures, will allow us to accomplish the             The IOM report wants incentives to          I can be reached at my e-mail address,
following:                                        health care providers who submit per-
                                                                                                                       continued on page 181

                                                                                                     Vol. 32 No. 3 • March 2007 •   P&T® 123
continued from page 123

 1. Committee on Redesigning Health Insurance Performance
    Measures, Payment, and Performance Improvement Programs.
    Rewarding Provider Performance: Aligning Incentives in Medicare.
    Washington, DC: National Academies Press; 2006.
 2. Institute of Medicine. Charter and by-laws. 2002. Available at:
 3. Institute of Medicine. Crossing the Quality Chasm: A New System
    for the 21st Century. Washington, DC: National Academies Press;
 4. Kohn LT, Corrigan JM, Donaldson, MS, eds. Committee on
    Quality of Health Care in America. To Err Is Human: Building a
    Safer Health System. Washington, DC: National Academies Press;
    2000. s

                                                                       Vol. 32 No. 3 • March 2007 •   P&T® 181

Shared By:
Description: P4P full name of the "Proactive network Provider Participation for P2P", is an upgraded version of P2P technology, intended to strengthen the service provider (ISP) and client communication, reduce stress and operational backbone network transmission costs, and improve P2P file transfer improved Performance. Randomly selected with the P2P Peer (peer) different, P4P protocol to coordinate the network topology data, can effectively select Peer, thereby improving the efficiency of network routing.