Pay-for-Performance in Nursing Homes

SUMR Presentation

Mentor: Rachel Werner

Theory

• People respond to incentives.• Current system: payment based on

services/quantity, not health/quality• Final goal of health care system: improve

health• Under P4P: Providers are rewarded for

meeting pre-established targets in quality of care they deliver

Nursing Home Residents

2006: 1,375,661 Nursing Home Residents

States with P4P NH Program

Red = Currently running P4PPink = Planning

Types of Measures

• Staffing Levels• Clinical Measures• Resident Satisfaction• Administrative Costs• Medicaid Utilization Ratio• Deficiencies

Models for Financial Incentives

• Attainment – establish a target level of performance (Payment > 80% Staff Retention)

• Ranking – measures performance against other providers (Payment > top 10%)

• Improvement – Payment for achieving improvement over previous period.

• Continuous – Payment each time appropriate care is delivered.

State Survey Results - MeasuresState Staffing

LevelsClinical

MeasuresResident

SatisfactionDeficiencies Utilization

Ratio

Iowa X X X X

Oklahoma X X X X X

Kansas X X X

Georgia X X X X

Ohio X X X X

Minnesota X X X X

State Survey Results - PaymentState Attainment Ranking Improvement Continuous

Iowa X X

Oklahoma X

Kansas X X

Georgia X X

Ohio X

Minnesota X

Iowa1. Deficiency-free survey (2 pts)2. Regulatory compliance with survey (1 pt)3. Nursing hours provided (2 pts max) – 2 pts for >75 percentile4. Resident satisfaction (1 pt) - >50th percentile5. Resident advocate committee resolution rate (1 pt) - > 60th percentile6. High employee retention rate (1 pt) - > 50th percentile7. High occupancy rate (1 pt) – at or above 95th 8. Low administrative costs (1 pt) - >50th percentile9. Special licensure classification (1 pt)10. High Medicaid utilization (1 pt) - > 50th percentile

7 pts and higher: 3% increase in daily per diem reimbursement raet. 5-6 pts: 2% increase 3-4 pts: 1% increase

Started: July 2002

Bigger Question

• Does P4P affect health outcomes in nursing homes?– Difference between Nursing Home and Hospitals?– Effect on health disparities?

The Road to Universal Health Care:

A Look at Singapore

Mentor: Arnold Rosoff

Singapore

A rich history of public-funded healthA strong Confucian philosophy Solidarity

The Singapore Model

By the Numbers

Infant Mortality 2.30 per 1,0000 (1st)

Life Expectancy 81.8 (3rd)

%GDP spent on Health Care 3-4%

WHO Ranking6th (out of 191)

Consumer-Directed Health Care

The Republican “Ace in the Hole”Focuses on individual responsibilityA free market solution for health care

Competition – drives down prices Individual Choice – eliminates moral hazard

The Singapore Model

Medisave (Medical Savings Accounts) 6 – 8 % of income is placed in a personal MSA. Administered by the Central Provident Fund (CPF) Rolls over from year to year

Medishield (Catastrophic Medical Insurance) Vast majority of Singaporeans buy in. Low premiums, widely transparent benefits

Other ‘safety nets’ Eldershield Medifund

The Singapore Model

Lowering Costs: Moral Hazard or Rationing? Limits on everything: from drugs to MSA withdrawals Moral Hazard Myth? e.g. Hospital Wards

Responsibility: Individual or Family? MSA funds – cover immediate family members

Additional Issues

Means Testing Screening applicants based on income/wealth to

determine subsidies Very unpopular – hot political issue

Health Disparities Haves vs. Have-nots?

Rise of private insurance Adverse selection

Singapore: A Model for the US?

Distrust in the governmentFocus on individualUnwillingness to ration

Special thanks to the following people for their generous support:

The University of Pennsylvania Provost’s Diversity Fund

The Center for Health Equity Research and Promotion (CHERP)

Pennsylvania Department of Health Office of Health Equity

Arnold Rosoff and Rachel WernerSUMR and LDI