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California's Pay for Performance Breaks Ground With New Program Components

Health Leaders- Inter Study, the leading provider of managed care market intelligence, reports that the nation's largest pay for performance program is breaking new ground with the addition of cost-efficiency measures and the development of a historic agreement that would permit health plans access to laboratory results completely held by physician groups. According to the latest California Health Plan Analysis, the state's physicians are in general supportive of the program; though, they believe the program, which is sponsored by the Integrated Healthcare Association in California, requires a significant boost in payment to observe a return on investment.

Chris Lewis, market analyst for Health Leaders-Inter Study and author of the report states, "The data exchange, which would give physician groups additional information they're looking for from health plans, is seen as critical to getting insurers to put more money into the bonus payment program sponsored by the Integrated Healthcare Association."

Ever since 2003, the Integrated Healthcare Association has paid out about $207 million in bonuses to 40,000 doctors. Physician groups have been pressuring health plans to put up further money to maintain their long-term investment in the program, while health plans and purchasers have pushed to take in cost efficiency measures in the pay for performance program. Additionally, more outcomes measurements are being added to the program, not only to track improvements in preventive screenings, but also to determine whether members' health status is improving.

Starting in 2008, the Integrated Healthcare Association is adding cost-efficiency measures for payment in 2009. Efficiency is a main component of healthcare quality improvement and that variations in the cost and effectiveness of care continue to rise within the provider community. Physicians are split on the issue, with some saying; efficiency metrics should have no part of a program designed to improve quality.



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