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Patient-Focused FundingLessons from the Experience in British Columbia
Jonathan D. Agnew, PhD
Executive Director, Practice Support & QualityBritish Columbia Medical Association
April 2013Presentation to the Quebec Medical Association
Outline of the Presentation
1. Definitions and Terms and Concepts
2. The experience in British Columbia
3. Tools for physicians considering a patient-
focused funding initiative
Key Messages
• It is possible to create successful programs for patient-focused funding—as long as you know what you are getting in to
• There are lessons to learn from British Columbia
• The secret to success lies in adopting a common purpose around quality care and in meeting the needs of payers and providers
Getting the Definitions Right
Patient Focused Funding
Pay for Performance:Links the provider’s performance to
compensation
Activity Based Funding: Links the number and case-mix of
patients treated with hospital income
Relative Rank
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
Incentives for top performers to maintain effort
Less incentive for performers unlikely to achieve
Werner RM and RA Dudley (2009). “Making the ‘Pay’ Matter in Pay-for-Performance: Implications for Payment Strategies.” Health Affairs 28(5):1498-1508
Relative Rankwith penalties
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
May increase incentive for worst performers
Strains already limited budgets, further reducing quality of care
PercentageRecommended
20%
30%35%
40% 40%45% 45% 45%
60%
70%
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
Incentive for providers to do the right thing every time they see a patient
If little variation in performance, only a small difference in bonus pay
Target Attainment
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
Incentive for all to reach target
No incentive to go beyond the target. Less incentive for poor performers unlikely to attain target
Target Attainmentwith bonus
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
Incentive for all to reach target, plus incentive to improve performance
Less incentive for poor performers unlikely to attain target
ABF as Target Attainmentwith bonus
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
Incentive for all to reach target, plus incentive to improve performance
Less incentive for poor performers unlikely to attain target
Diagnosis related group payment: $100
$50
$60$70
Assumptions behind incentives
1. Adaptable
Assumptions behind incentives
2. Rational
Assumptions behind incentives
3. Future-oriented
What does the literature say?
Pay-for-Performance in BC:The Practice Support Program
Training Modules
Incentive Payments
Ongoing Supportfor physicians
Government support
0%
10%
20%
30%
40%
50%
60%
70%
80%
2001/02 2002/03 2003/04 2004/05 2005/06
n(DM) = 274 000
2006/07 (f)
Provincial Average
With CDM Bonus
Without CDM Bonus
Source: MSP Claims Database, Ministry of Health, BCMA Economics Department,
March 2007. CDM Incentive Fee introduced September 2003.
CDM Bonus Introduced
% of Diabetes patients receiving 2 or more A1C tests per year
~ 2 800 physicians billing for
~ 135 000 patients
Activity Based Funding in BC
1.Creation of the Health Services Purchasing Organization
2.Funding of $250 million. Target attainment with improvement bonus model
3.Joint replacement, breast cancer, spinal surgery, emergency departments
3652
2124
585
943
2749
1790
546413
0
500
1000
1500
2000
2500
3000
3500
4000
Total Waiting Waiting < 6mo Waiting 6-12mo Waiting > 1yr
Total Daycare CasesWaitlist Reductions at Vancouver Acute
Apr01 2012 Dec31 2012
25% 16% 7% 56%Reduction
Source: Surgical Patient Registry (Jan 15, 2013), excluded cataracts
3184
2493
373 318
2490
1967
339
184
0
500
1000
1500
2000
2500
3000
3500
Total Waiting Waiting < 6mo Waiting 6-12mo Waiting > 1yr
Total Inpatient CasesWaitlist Reductions at VA
Apr01 2012 Dec31 2012
22% 21% 9% 42%Reduction
Source: Surgical Patient Registry (Jan 15, 2013)
The Payer’s Needs: Triple Aim
patient (and provider!) experience
lowered per capita costs
improved population health outcomes
The Physicians’ Needs
Pay us
Value us Support us
Train us
The Key Elements
relationships
incentives
supports
quality measurement
“RISQy” Business
supports
quality measurement
Adopt a Common Purpose
How can we improve the quality of care for patients?
How can physicians ensure successful collaboration?
1. Reflect on the assumptions behind incentive programs
2. Ensure the payer’s needs are met (triple aim)
3. Ensure physicians’ needs are met (value, train, pay, support)
4. Put all the pieces in place (RISQy business)
5. Adopt the common purpose of improvement for patients
