Paying for Quality in the UK: New Models

Peter C. Smith

Centre for Health Economics, University of York, UK

Four elements of the principal/agent problem

– Objectives• How close are those of principal and agent?

– Information• How public, how verifiable, how costly?

– Incentives• Designed vs accidental

• Numerous design issues

– Managerial capacity• Designing

• Auditing

• Evaluating

Incentives: some design issues

• which measures of performance to use as a basis for rewards;

• how targets are to be set;• over what time period the scheme is to operate;• how performance measures along several dimensions are to

be combined;• how much reward is to be dependent on attainment;• what is the link between improved performance and reward• what risk sharing arrangements are used• audit arrangements• evaluation arrangements.

Incentives: what are the rewards?

• Financial (individual)

• Financial (organizational)

• Professional advancement

• An easy time

• Freedom of action

• Prestige and perceived worth

• Intrinsic satisfaction

General practice in England• All citizens must be registered with a general practitioner• Typical practice population 5,500 (but increasing)• Average three practitioners per practice• Traditional gatekeeping role in NHS• 2/3 general practitioners are independent contractors

with the NHS• Traditional ‘General Medical Services’ contract

developed piecemeal over decades - a mixture of capitation, salary, fee for service and grants

• GPs are used to working in an incentivized environment• New GMS contract now in force.

The New GMS contract

• Developed in negotiation between government and providers

• Approved by 79.4% in a ballot of GPs, with a response rate of 70%

• Major emphasis on clinical quality• Up to 30% of income determined by quality

incentives• Major reliance on self-reporting (with external

audit).

http://www.nhsconfed.org/gmscontract/

Quality and Outcomes Framework

• Each practice can earn ‘quality points’ according to reported performance

• 146 performance indicators• 1,050 points distributed across indicators according

to perceived importance• Points based on absolute level of attainment (not

adjusted for local difficulty)• About £75 per point for an average practice, but

increasing if a difficult environment• Minimum income guarantee (no loss of earnings)

GMS Contract:Indicators and points at risk

Area of practice PIs Points

Clinical 76 550

Organizational 56 184

Additional services 10 36

Patient experience 4 100

Holistic care (balanced clinical care)

- 100

Quality payments (balanced quality)

- 30

Access bonus - 50

Maximum 146 1050

GMS Contract: Clinical indicators

Domain PIs Points

CHD including LVD etc 15 121

Stroke or transient ischaemic attack

10 31

Cancer 2 12

Hypothyroidism 2 8

Diabetes 18 99

Hypertension 5 105

Mental health 5 41

Asthma 7 72

COPD 8 45

Epilepsy 4 16

Clinical maximum 76 550

Hypertension: indicators, scale and points at risk

Records Min Max Points

BP 1. The practice can produce a register of patients with established hypertension

9

Diagnosis and initial management BP 2.The percentage of patients with hypertension whose notes record smoking status at least once

25 90 10

BP 3.The % of patients with hypertension who smoke, whose notes contain a record that smoking cessation advice has been offered at least once

25 90 10

Ongoing Management BP 4.The % of patients with hypertension in which there is a record of the blood pressure in the past 9 months

25 90 20

BP 5. The % of patients with hypertension in whom the last blood pressure (in last 9 months) is 150/90 or less

25 70 56

The patient experience domain

• Routine appointments must be not less than 10 minutes (30 points);

• An ‘approved’ patient survey is undertaken each year (40 points);

• The practice has ‘reflected on the results and proposed changes if appropriate’ (15 points);

• The practice has discussed the results as a team with patient representatives, with ‘some evidence that [appropriate] changes have been enacted’ (15 points).

Some arithmetic• For an average practice:

– 5,500 patients;– 3 practitioners;– average levels of disadvantage.

• £75 per point• So practice income at risk = £75 x 1,050 = £78,750• Per practitioner = £78,750/3 = £26,250 ($50,000)• Approximately one third of base income.• An intention to rise to £120 per point (a further

60%).

GMS contract: the strengths

• Rewarding what matters– structure, process and outcome

• Balanced scorecard• Local freedom to decide on priorities• Real rewards• Consistent with national clinical guidelines• Developed by the profession• Rewards teams, not individuals• Commitment to review and update

GMS contract: the risks

• Complexity may dilute its effectiveness • Unmeasured activity ignored • Reward structure distortive (too easy, too hard, wrong balance) • Discourages practice in challenging environments (cream

skimming, recruitment of GPs in disadvantaged areas)• Discourages collaborative actions (social care)• Gaming (e.g. length of consultation)• Misrepresentation (lack of effective audit)• Ossification• Increases managerial costs• Undermines professional ethic, morale and unremunerated

activity (‘endogenous preferences’).

GMS contract. Why UK? Why now?

• Extra money required to maintain supply of GPs• Decision to make finance conditional on improved

quality• Single (or dominant) payer• GPs with registered populations (denominator of many

of the performance indicators)• Consensus on what constitutes ‘good’ practice

(widespread national guidelines)• General acceptance amongst GPs of need to improve

quality• Improving IT infrastructure (forthcoming electronic

health record)

GMS contract: the priorities?

• Good system of audit• Urgent monitoring, evaluation and review• Addressing most grotesque anomalies• Better measures of quality and risk adjustment.• Design issues:

– power and size of incentives– difficulty of targets– risk sharing– avoidance of gaming and other adverse outcomes

• Maintaining and enhancing the support of GPs