The growth of pay for performance

By Scott Kreiling, President, Regence BlueShield of Idaho
September 18, 2015
scott kreiling post

Whether in our careers or in our lives away from work, we’re very much dialed in to the concept of pay for performance. Our compensation at work is – more often than not – based on the merits of what we do. Do we meet or exceed goals or position expectations? Does the quality of our work compare favorably to that of our peers? Away from our jobs, when we shop for home repairs, for instance, don’t we base our decisions on who to hire on a particular contractor’s reputation for performing well – doing quality work for a price that’s affordable?

Across the country and across Idaho, the health care industry is slowly but surely moving in this same direction. Traditions of the past where health care providers were paid based on the volume of medical tests and procedures performed – regardless of the true value of those services – are being replaced by consumer-serving pay for performance models. At their most basic level, pay for performance health care reimbursement models create a “merit-based” pay system among providers based on the quality, efficiency and outcomes of their performance.

Nationally, organizations such as the Institute of Medicine, Leapfrog Group, Institute of Health Improvement, and National Quality Foundation have come out solidly in favor of pay for performance initiatives. As I’ve traveled around the state meeting with brokers and employers, I’ve heard equally strong endorsements. They want us at Regence to embrace and expand this same care reimbursement approach here.

These companies are having to cope with ever-rising hospital and pharmaceutical costs, increased utilization and government rules and regulations that, collectively, are stretching their health care budgets nearly to the breaking point. They’re looking for innovative solutions that offer better value for their premium dollar. These forward-looking, highly successful Idaho employers have come to believe that pay for performance is a potentially powerful tool that can help them save money, while looking out for the health and wellness interests of their employees and employee families.

I’m pleased to report a growing number of Idaho providers are listening. Our pay-for-performance partners in the physician group and hospital community already include 5-Star quality rated Northwest Specialty Hospital, Portneuf Quality Alliance, Primary Health Medical Group, and Valley Medical Center. These leading health care organizations have all come to agree that our mutual triple-aim goals of lower costs, better outcomes and a better patient experience are best achieved when physicians and hospitals are measured and compensated for the quality of the services provided – not just the quantity.