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This study examined the impact of Fairview Health Services' primary care provider compensation model, in which 40 percent of compensation was based on clinic-level quality outcomes. Fairview Health Services is a Pioneer accountable care organization in Minnesota. Using publicly reported performance data from 2010 and 2012, we found that Fairview's improvement in quality metrics was not greater than the improvement in other comparable Minnesota medical groups. An analysis of Fairview's administrative data found that the largest predictor of improvement over the first two years of the compensation model was primary care providers' baseline quality performance. Providers whose baseline performance was in the lowest tertile improved three times more, on average, across the three quality metrics studied than those in the middle tertile, and almost six times more than those in the top tertile. As a result, there was a narrowing of variation in performance across all primary care providers at Fairview and a narrowing of the gap in quality between providers who treated the highest-income patient panels and those who treated the lowest-income panels. The large quality incentive fell short of its overall quality improvement aim. However, the results suggest that payment reform may help narrow variation in primary care provider performance, which can translate into narrowing socioeconomic disparities., (Project HOPE—The People-to-People Health Foundation, Inc.)

Providers that care for disproportionate numbers of disadvantaged patients tend to perform less well than other providers on quality measures commonly used in pay-for-performance programs. This can lead to the undesired effect of redistributing resources away from providers that most need them to improve care. We present a new pay-for-performance scheme that retains the motivational aspects of standard incentive designs while avoiding undesired effects. We tested an alternative incentive payment approach that started with a standard incentive payment allocation but then "post-adjusted" provider payments using predefined patient or provider characteristics. We evaluated whether such an approach would mitigate the negative effects of redistributions of payments across provider organizations in California with disparate patient populations. The post-adjustment approach nearly doubled payments to disadvantaged provider organizations and greatly reduced payment differentials across provider organizations according to patients' income, race/ethnicity, and region. The post-adjustment of payments could be a useful supplement to paying for improvement, aligning the goals of disparity reduction and quality improvement., (Project HOPE—The People-to-People Health Foundation, Inc.)

More than 150 private companies contract with the federal government to provide Part D prescription drug benefits to Medicare beneficiaries, either through stand-alone drug plans or as part of Medicare Advantage plans. The Centers for Medicare and Medicaid Services (CMS) evaluates these companies on a set of performance measures, including plan enrollees' medication adherence. We used 2012 data from CMS and data from the US Census Bureau to investigate whether these performance ratings are influenced by the socioeconomic characteristics of enrollee populations. We found that some companies have a substantial advantage over others because of their enrollees' socioeconomic characteristics, with more than a third of the variation in adherence scores tied to these characteristics. CMS should seriously consider adjusting adherence scores to account for differences in the socioeconomic characteristics of enrollee populations.

Very little is known about rank-and-file physicians' views on pay-for-performance (P4P) and public reporting. In a national survey of general internists, we found strong potential support for financial incentives for quality, but less support for public reporting. Large majorities of respondents stated that these programs will result in physicians' avoiding high-risk patients and will divert attention from important types of care for which quality is not measured. Public and private policymakers might avoid a physician backlash and better succeed at improving health care quality if they consider these concerns when designing P4P and public reporting programs.