Last year’s Senate Bill 217‘s (enacted in June ’08) would have “value benefit plans” that would “encourage the use of a pay-for-performance system for reimbursing health care providers, where appropriate.” Barack Obama’s health care czar Tom Daschle has written that “one way for Washington to spark improvement would be to tie payment to performance, instead of basing it soley on the services rendered.”
Do we really want politicians to design insurance plans in this manner? Not only does this violate the rights of insurance companies to design products as they see fit, pay-for-performance (“P4P”) has disturbing consequences, as Linda Gorman points out:
Targets create incentives to manipulate patient records and official statistics, corrupting data used to measure system performance. Spot checks of NHS hospitals show that they extensively manipulated the data that were supposed to be used to compile waiting lists. Techniques included deliberately booking operations on days patients were known to be on vacation (thus creating an excuse to suspend them from waiting lists in their absence [link], excluding patients from lists if they had waited “too long” and arbitrarily reclassifying patients so that they were shifted to lists that were not monitored [link].
Government targets for waiting times in accident and emergency departments were fulfilled by re-designating corridors and treatment rooms as “pre-admission units” [link]. Wheels were removed from gurneys in order to reclassify them as beds. Hospitals also “stack” ambulances, making patients wait in them until they think that a patient can be seen within the 4 hour target specified by the government [link].
This is not to say that P4P has no place, but if anyone is going to figure out a better way, don’t expect it to be politicians.