American College of Physicians: Internal Medicine — Doctors for Adults ®

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Minimizing the hidden costs of quality improvement

To hold on to the maximum amount of performance incentives, physicians take steps to streamline workflow and reduce overhead

From the December ACP Observer, copyright 2005 by the American College of Physicians.

By Yasmine Iqbal

For Stephen J. Wikle, ACP Member, an internist in Irvine, Calif., pay-for-performance programs have paid off in a big way.

Dr. Wikle is a member of Greater Newport Physicians, an independent practice association that participates in the pay-for-performance program developed by California's Integrated Health Association (IHA), a nonprofit statewide consortium of medical groups, health plans and health systems. IHA's statewide bonuses—last year, a whopping $50 million—are based on hitting targets for clinical measures, patient satisfaction and information technology investments.

Participating in the program has helped Dr. Wikle and his colleagues improve their care of patients with chronic diseases, as well as screening rates for mammograms and Pap smears. Annual bonuses can average between 10% and 20% of a physician's income—a figure that, Dr. Wikle said, "certainly helps motivate doctors to practice as well as they can."

But those successes come at a price. The 300-physician independent physician association invested in patient reminder systems, disease registries and even a clinical data warehouse to help track physician performance and report data.

And for Greater Newport Physicians—just as for any group participating in pay-for-performance programs or internal quality improvement efforts—there are hidden costs associated with program evaluation and implementation. While those costs aren't as obvious as, say, software investment, they definitely add up if not carefully managed.

Today, said Dr. Wikle, quality improvement is a seamless part of practice operations. But he admits that getting up to speed on new software, tracking down patients who were missing required screenings and adapting to new workflow "created a lot of initial chaos."

We asked physicians to identify hidden costs of quality improvement efforts and suggest strategies for managing those expenses. Here's what they had to say:

  • Hidden cost #1: acquiring valid data. To keep up with quality measures, physicians have to track data on patient populations. A patient registry, a list of all patients in your practice who share some characteristic or condition, is an invaluable tool for population management.

    But it's not enough to simply create a registry, noted family physician Donald W. Robinson, MD, a solo practitioner in Hamburg, N.Y., who participates in three pay-for-performance programs run by area HMOs. "Even if you have data in a nice, usable format, the question is: Do you trust it? The data need to be continually cleaned up, and that involves thinking about each individual patient."

    To help him do so, Dr. Robinson has hired a medical assistant at a cost of $22,000 a year to maintain his patient registry, perform quality audits and meet quality targets.

    And earlier this year, he purchased a $50,000 electronic health record (EHR) system. "The EHR allows me to quickly review labs, test results and prescriptions that validate or refute raw diagnostic data," he said. "I could do that work manually, but it would be much slower." The EHR costs were somewhat offset by his incentive bonus payments—his largest carrier, for instance, paid him $30,000 last year in bonuses—but he still had to invest a significant amount of his own money.

    At the same time, he said, "it's not just a matter of economics." Examining data and figuring out how to improve on performance measures take a couple of hours of his time every week. And even the EHR investment came with some serious ancillary costs. According to Dr. Robinson, he had to shut down his practice for two weeks for system installation and staff training--and lost an estimated $20,000 in revenue.

  • Hidden cost #2: tracking down patients for needed tests. For you to score well on performance measures, patients have to stay up-to-date on recommended screening and tests. That can be a time-consuming challenge for you and your staff.

    Some physicians use technology to streamline that process. Dr. Wikle's group, for example, uses RelayHealth, a secure doctor-patient e-mail messaging system that allows him and staff to contact patients to schedule appointments, as well as manage prescription refills and discuss test results. (He also uses the system to send out targeted e-mails to specific patient groups.)

    "Our group includes patient satisfaction in the bonus structure," Dr. Wikle said, "so I feel the cost of the service is reflected in higher patient satisfaction."

    E. Rodney Hornbake, FACP, a general internist and solo practitioner in Essex, Conn., uses blunt talk and staff time to make sure patients get the tests they need.

    If a patient with diabetes is overdue for a dilated eye exam, for instance, "I call the patient, tell him that he might go blind from complications and then immediately give him a referral to an optometrist whom I've worked with for years." He then has a staff member call the optometrist's office, which in turn contacts the patient to follow up on appointment scheduling. After the exam is complete, the optometrist sends Dr. Hornbake a written report.

  • Hidden cost #3: dealing with patient non-compliance. Skeptics of pay-for-performance programs note that initiatives, if not properly structured, could penalize physicians who care for sicker or non-compliant patients. According to Glenn D. Littenberg, FACP, a gastroenterologist in Pasadena, Calif., and a member of ACP's Performance Measurement Subcommittee, "We need to make sure programs don't put inappropriate pressure on physicians to meet performance measures by refusing to see patients who make their numbers look bad."

    Part of that struggle is ensuring that performance data doesn't get skewed by patient noncompliance. In the meantime, many physicians are redoubling their efforts to help patients, particularly those with chronic conditions, get healthier.

    In patients with chronic disease, Dr. Hornbake said, "You have to rethink your entire workflow to improve outcomes." For instance, during office visits, he uses a three-column Microsoft Word table. The first column contains different targets, such as cholesterol or blood pressure; the second contains the patient's results; and the third contains an action plan for the patient to reach better control.

    "I fill out the form and hand it to the patient, which keeps him or her focused on what's important and keeps down extraneous conversation," he said. He also schedules regular diabetes management visits, instead of trying to use office time when the patient is in for an acute problem.

  • Hidden cost #4: not delegating tasks. According to Howard B. Beckman, FACP, medical director of the Rochester Individual Practice Association (RIPA) in Rochester, N.Y., one of the most costly mistakes physicians make in pay for performance is using their own time to deal with clerical tasks.

    When tests are reported missing, someone has to pull charts to either track patients down—or correct inaccurate data. Practices that succeed with quality improvement and pay for performance, said Dr. Beckman, delegate those tasks to nurses, medical assistants and other non-physician personnel. "You can even have a high school student come in to review the charts and figure out what tests are missing," he said.

  • Hidden cost #5: managing longer visits. Fitting in required screenings, tests and patient counseling can add several minutes to office visits. Getting and staying organized is vital.

    According to Dr. Beckman, unless physicians have some kind of reminder system, they're likely to forget about basic screening exams. "In the heat of the visit, especially if the patient has a pressing problem, it's easy to forget what's in your patient registry," he said.

    Staying on track begins with organizing and preparing patient charts, he added. He suggested having staff make lists of all the performance measures you need to track for each patient.

    Before each visit, have an assistant go through the charts, figure out what each patient needs and generate lab requisitions in advance. All you have to do is talk to patients about what they're due for and approve the tests or conduct the exams. "As long as you have a built-in prompting system," he said, "getting the tests you need is generally pretty quick."

    Sharad S. Swami, ACP Member, an internist based in Clinton, Okla., also noted a financial advantage to those longer visits: Even though he might spend more time with diabetes patients, he provides more billable services, such as foot exams.

    "This is good for revenue, and more importantly, it increases quality," he said. His solo practice is one of only a few small practices to have earned National Committee for Quality Assurance recognition for diabetes and heart/stroke care.

    It's the kind of payoff that physicians have to weigh when considering the costs of quality improvement or pay-for-performance efforts.

    "Take the time to figure out what it's going to take to participate in the plan, what the reimbursement method is and whether the effort will be worth it," advised Dr. Beckman. Opinions differ on what constitutes a payoff worth shooting for. "Between 5% and 15% is what gets noticed," said Dr. Beckman.

    New York's Dr. Robinson, a solo practitioner, had a different take. "Five percent would cover costs, but just barely," he said. "Smaller practices need more help and higher payout percentages."

    In the end, Dr. Robinson said, physicians who succeed with quality improvement don't focus exclusively on costs, hidden or otherwise.

    "The whole idea of pay for performance is that doctors are motivated by money, but that's not true," Dr. Robinson said. "I believe preventive medicine is profitable medicine, and all doctors want to do quality work. A well-designed pay-for-performance program gives them the cash, training and equipment that they need."

Yasmine Iqbal is a freelance health and science writer in Philadelphia.

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