JAMA Forum: Payment Power to the Patients

Ashish K. Jha, MD, MPH (Image: Aubrey LaMedica/Harvard T.H. Chan School of Public Health)

There is broad consensus that the quality of care that is delivered in the United States is uneven and too often inadequate. For more than a decade, the approach to remedying deficiencies in health care quality has been through measurement, incentives, and accountability.

But now consensus is emerging that efforts have not worked particularly well, and that doing more of the same is unlikely to lead to progress. It may be time to try a radically simple idea: let patients decide what comprises high-quality health care.

Current State of Affairs

Beyond consensus that the current approach to quality measurement and incentives isn’t meaningfully improving care, there are 2 other areas of agreement: that there are too many quality measures of varying degrees of utility and that a small number of high-value measures that truly capture what patients care about would be an improvement. Although this is an important starting point, there is less agreement on what constitutes those high-value clinical areas and how best to measure them, partly because experts, advocacy groups, payers, and various agencies in state and federal government often have differing views of what is good care.

Another problem is disagreement on the optimal way to assign financial penalties (or bonuses) to performance on quality measures. For example, we might all agree that good care for an otherwise healthy patient admitted to a hospital with an acute illness would include both their survival and avoiding having to be readmitted. Medicare, through its multitude of pay-for-performance programs, incentivizes both lower readmissions and lower mortality. Because of the way these programs are currently structured, the penalties for high readmissions are 6 times greater than penalties for high mortality. This discrepancy between penalty weights creates an odd (and likely unintended) conundrum: hospitals are incentivized to focus more on reducing readmissions than on reducing deaths.

But the bigger problem is that it is hard to achieve consensus on the exact make-up of high-value care in a large and diverse country. A centralized approach, in which the Centers for Medicare & Medicaid (CMS) evaluates all hospitals based on the same set of measures and applies the same incentive-weighting approach for all patients, is inherently problematic. Indeed, for some patients at the end of life, avoiding hospitalizations may be a higher priority than avoiding death. But by codifying that for all patients, Medicare creates peculiar incentives that are inconsistent with many patients’ wishes. And that makes it difficult to claim that these value-based payment arrangements are particularly “patient-centered.”

A Radically Simple Idea

Everyone involved in the national policy debate, from researchers to policy makers to advocacy groups, all claim to speak on behalf of patients. But the patient’s voice is missing because there is no single patient voice. Each patient—indeed each one of us—has slightly different values and a slightly different conception of what he or she wants from care. After a hip replacement, the most important issue for some might be avoiding pain while for others, it might be achieving excellent functional status, even with the trade-off of some residual pain. The notion that Medicare can assign values for all patients is dangerously simplistic. A wholly different approach would be to let patients decide.

Here’s how such an approach might work: 30 or 60 days after hospitalization, every Medicare patient would be asked to evaluate the care they received and assign a payment to the hospital, which would determine up to 10% of the payment. For example, after a pneumonia hospitalization (for which a standard CMS payment might be $10 000), $9000 would be guaranteed to the hospital and $1000 would be determined by the patients. Thus, a patient who experienced excellent care might assign the full $1000 (and the hospital would receive $10 000), whereas a patient who perceived her care to be of less-than-expected quality might assign only half of the payment (so the hospital would get $9500).

By so altering the dynamics of what constitutes high-value care, hospitals would need to ascertain what patients value and how to deliver it. It would force hospitals to become flexible and truly patient-centered, by meeting the varying needs and values of individual patients.

Another benefit is that there may be less of a need for risk adjustment. A patient who is sick can still receive what he or she perceives to be high-quality care, just as a patient who is healthy can receive poor care. The same principle would likely apply for socioeconomic status. Both low- and higher-income patients can perceive their care to be high quality, even if that care addresses different needs. This payment system would create incentives to do so without penalizing hospitals for having inherently different patient populations.

Such a system would solve both the metrics problem (too many, often contradictory, poorly measured metrics) and the incentives problem (paying 6 times more for an avoided readmission than an avoided death). This would give patients and families, who are the best source of information about whether the care met the patient’s needs, direct say.

Admittedly, this approach will be controversial. Critics would argue that patients will focus on superfluous aspects of their experience (such as parking, food, or rooms) instead of the aspects of care that truly reflect quality. However, while this concern is understandable, the evidence suggests that patients are capable of judging quality and are generally not persuaded by such amenities. Hospitals that have lower mortality, lower complications, and provide more evidence-based care receive much higher ratings from patients than do hospitals that fail in these technical measures of quality.

Another concern is that such an approach will incentivize hospitals to provide the wrong types of care—such as giving unnecessary antibiotics or opioids because of patient demand. This concern makes less sense in the context of inpatient care, in which patients rarely demand inappropriate antibiotics. To the extent that there is any evidence that patients give hospitals poorer scores for avoiding opioids, the impact is very small.

Hospital industry advocates will worry that some hospitals will face significant financial risk. Indeed, this is an intended effect of all pay-for-performance programs. If a hospital’s care is leading to high levels of death, disability, and poor patient experience, that hospital should feel some degree of financial risk. Punishing poor-quality hospitals and rewarding excellent ones should be a goal.

Finally, it’s possible that the average payment for care after the patient-determined portion is too low, constituting a sizeable payment cut to all hospitals. To the extent that this is a problem, CMS could easily address it by altering these payments so that the program is budget-neutral to CMS, the average hospital sees little or no effect, the worst hospitals are penalized, and the best receive a bonus.

This proposal would require some tinkering and experimentation before being implemented nationwide. And the approach may have some unintended adverse effect—but that occurs with even the most effective therapeutic drug. In this case, the benefits are likely to outweigh the risks and ultimately, the system is likely to be better off.

This simple “treatment” might seem risky, but the bigger risk is doing more of the same. Letting patients decide what high-quality care may be an idea whose time has come.


About the author: Ashish K. Jha, MD, MPH, is K. T. Li Professor of Global Health and Health Policy at the Harvard T. H. Chan School of Public Health and a practicing internist at the Veterans Affairs Boston Healthcare System. He received his doctor of medicine from Harvard Medical School and was trained in internal medicine at the University of California, San Francisco. He received his master’s in public health from Harvard School of Public Health. Dr Jha’s major research interests lie in improving the quality and costs of health care. His work has focused on 4 primary areas—public reporting, pay for performance, health information technology, and leadership—and the roles they play in fixing the US health care system.

About The JAMA Forum: JAMA has assembled a team of leading scholars, including health economists, health policy experts, and legal scholars, to provide expert commentary and insight into news that involves the intersection of health policy and politics, economics, and the law. Each JAMA Forum entry expresses the opinions of the author but does not necessarily reflect the views or opinions of JAMA, the editorial staff, or the American Medical Association. More information is available here and here.




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