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American Academy of Family Physicians
Monday Apr 15, 2013

Pay for Performance still in minority of health care dollars

While "pay for performance" is at the center of many discussions about the future of American health care, a recent study of employer-provided insurance shows it still makes up a small – but growing – piece of the market.

Catalyst for Payment Reform (CPR), a group representing large employers and other major purchasers of health care, last month released its first National Scorecard on Payment Reform.

The survey of 57 commercial insurance plans, representing about half of all commercially insured lives, found that only about 11 percent of health care spending is currently tied to how well hospitals and physicians provide care or improve quality and reduce waste.

A little more than 89 percent of payments is still traditional fee-for-service.

The group said just 6 percent of payments to outpatient primary care physicians is value-oriented, identical to the amount for outpatient specialists. Hospitals were a little better, with 11 percent of payments tied to quality.

CPR said the market is moving in the right direction, estimating that 3 percent or less of payments were tied to value when the group formed in 2010. It also expressed interest in seeing more payments going to primary care, noting that 75 percent of outpatient payments were going to specialists.

CPR has set a goal of 20 percent of commercial payments being value-oriented by 2020.

Insurance plans that are targeting value are using a wide range of approaches, the study found, including adding shared savings to fee-for-service; bundled payments; full capitation; and shared risk. Overall, 57 percent of value-based payments penalized providers for missing quality or cost goals, as opposed to the 43 percent that provided bonuses or other incentives.

To learn more about pay for performance, read this article from the FPM archives: What Family Physicians Need to Know About Pay for Performance.

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