1. Patient-Focused Funding
Lessons from the Experience in British Columbia
Jonathan D. Agnew, PhD
Executive Director, Practice Support & Quality
British Columbia Medical Association
April 2013
Presentation to the Quebec Medical Association
2. 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
3. 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
4. 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
5. 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
6. Relative Rank
with 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
7. Percentage
Recommended
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
8. 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
9. Target Attainment
with 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
10. ABF as
Target Attainment
with 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
15. Pay-for-Performance in BC:
The Practice Support Program
Training Modules
Incentive Payments
Ongoing Support
for physicians
Government
support
16. 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
17. 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
27. Adopt a Common Purpose
How can we improve the
quality of care for patients?
28. 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
Editor's Notes
In the next few slides, I’d like to go over some of the conceptual challenges around patient-focused funding. Since this audience is familiar with the challenges around global budgeting--indeed, it is precisely those challenges that have led Quebec and other Canadian provinces to examine these alternative methods of funding—I will not focus on those particular issues. Instead, I will examine here the advantages and disadvantages of various patient-focused funding arranagements.Let’s start first with pay for performance.
The first possible arrangement, which is also conceptually the simplest, is “relative rank.” Here, the top performers are given a bonus. Note that the reward is not for any absolute achievement, but rather their performance relative to their peers. Any initiative, for example, where the top 10% of hospitals are given a bonus, would fall into this category.The clearest advantage of such a program is that it gives and incentive for the top performers to maintain their effort.
Taken together, these are some challenging assumptions. And perhaps it is because the simple idea of offering a financial reward
Tak
That’s the conclusion of my presentation. It has been a pleasure speaking to you today, and now I would be more than happy to answer your questions. However, to ensure that I can communicate the best possible information, I’m going to give my response in English.
