Pay-for-performance programs can work in a Medicaid managed care setting, but only if health plans place enough dollars at stake and communicate effectively with providers, according to a Health Affairs Web Exclusive.
The work, supported by the California HealthCare Foundation (CHCF), describes results of a pay-for-performance demonstration project aimed at improving timeliness of well-baby care. The Local Initiative Rewarding Results (LIRR) Collaborative Demonstration, funded by CHCF and the Robert Wood Johnson Foundation, involved seven California Medicaid managed care plans in different regions from 2003 to 2005.
Five of the plans implemented various incentives for physicians and other primary care providers, while two did not. Each program had the goal of ensuring that infants received six well-baby checkups during the first 15 months of life.
The study found that incentives did not produce significant effects in four out of five plans. In one plan, referred to as "Plan D," incentives (in concert with existing incentives) appeared to have a dramatic effect, although data constraints prevented the researchers from establishing a causal relationship with certainty.
In addition to providing adequate monetary incentives, researchers found that Plan D had established good communication with providers and had already been offering an incentive for well-baby visits prior to the start of the demonstration project. Thus, providers were in the habit of reporting administrative data to the plan about such visits.
The LIRR demonstration revealed other factors crucial to the success of pay-for-performance and for providing better infant care. Timely well-baby visits were often difficult to achieve because low-income parents tended to be focused on economic subsistence and lacked adequate transportation. These parents also tended to be more mobile and less likely to see the same provider during the 15-month period. On the provider side, many lacked the staff, funds, and technology necessary to successfully remind families of upcoming visits.
The Web Exclusive is available free of charge on the Health Affairs site through the link below.