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A Lesson in Value-Based Payments from Across the Pond

Blog | 
Economics | 
Outcomes | 
System Dynamics | 

If you paid your kids to clean their rooms and keep them clean, would they? If you stopped paying them, would they keep cleaning their rooms because they realized that having a clean room is a good thing to do anyway? If so, you could use that money to incent them to do something else like cut the grass?

That’s basically what researchers from the National Institute for Health and Care Excellence, University of Cambridge and the University of Dundee—all in the United Kingdom—wanted to know about paying doctors in England to meet certain quality-of-care indicators. And what they learned could be a lesson for payers here who want their value-based reimbursement schemes to lead to sustainable changes in physician behaviors.

The researchers reported what they learned in the Sept. 6 issue of the New England Journal of Medicine, which you can read here.

The researchers studied 18 of 121 quality measure that are part of the National Health Service’s Quality and Outcomes Framework, or QOF, that began in 2004. Under the QOF, the NHS reimburses primary-care practices, or PCPs, a little extra for meeting the measures.

In 2014, the NHS stopped paying incentives to meet 12 of the 18 quality measures and used that money to pay all doctors a little more. It kept paying incentives to PCPs to meet the other six quality measures.

The researchers wanted to know how the end of financial incentives to meet the 12 quality measures affected the behaviors of the PCPs and compare those behaviors with those on the other six measures whose financial incentives didn’t end. The researchers looked at changes in behaviors one year out, two years out and three years out. Their study pool was 2,819 PCPs in England who care for more than 20 million patients.

Any guesses before I tell you what they found and reported in their published research?

Analyzing data in the patients’ EMRs, the researchers found that a large percentage of the PCPs stopped performing—or at least failed to document—the services needed to meet the 12 quality measures. The declines happened immediately the first year after the incentives vanished and stayed there for the next two years.

The biggest drop was in lifestyle counseling for patients with high blood pressure. Some 80.1 percent of the PCPs documented that they were doing that before the incentive went away. That dropped to 17.8 percent the first year after the incentive went away.

The researchers found little change in the behaviors of PCPs on the six measures for which the payment incentives continued. For example, in 2014, 93.2 percent of the PCPs said they gave smoking-cessation advice to smokers with chronic medical conditions. By 2017, that was up to 94.1 percent.

The researchers acknowledged that the PCPs may have continued to provide the services to patients on the 12 quality measures but stopped documenting the services in the patients’ EMRs because there no longer was a reason to prove that they did them. That may be true.

So you have one of three possibilities. Either a large percentage of the doctors stopped providing the 12 services to patients because there wasn’t any extra money in it for them. Or, a large percentage of the doctors stopped documenting the services because there wasn’t any financial reason to do so. Or, a mix of the first two possibilities.

Here’s what the researchers concluded: “The decline probably reflected changes in EMR documentation, but declines on measures involving laboratory testing suggest that incentive removal also changed the care delivered.” And their advice to payers?  “At a minimum, payers planning to remove incentives should monitor the quality of care after removal,” they said.

Most doctors want to do right by their patients. Each time I see my internist, he tells me to stop smoking and lose weight no matter what ailment prompted me to make an appointment. When I tell him that I don’t smoke and never have, he tells me to lose weight. I doubt if he checks those boxes off in my EMR.

So if you want doctors to provide prevention and wellness services to patients, incentivize them. And if you want them to check those boxes off in patients’ EMRs to prove that they provided those services, you may have to pay them to do that, too. If not, it’s just unreimbursed busywork.

That’s how markets work, and medicine is no different.


David Burda is a columnist for 4sight Health and news editor of 4sight Friday, our weekly newsletter. Follow Burda on Twitter @DavidRBurda and on LinkedIn. Read his bio here.

About the 4sight Health Author
David W. Johnson
David Johnson CEO 4sightHealth

David Johnson is the CEO of 4sight Health, a boutique healthcare advisory and investment firm. Dave wakes up every morning trying to fix America’s broken healthcare system. He is a frequent writer and speaker on market-driven healthcare reform. His expertise encompasses health policy, academic medicine, economics, statistics, behavioral finance, disruptive innovation, organizational change and complexity theory. Dave’s book, Market vs. Medicine: America’s Epic Fight for Better, Affordable Healthcare, is available on