Health Plan Pay for Performance Strategies

Health plans are increasingly turning to financial incentives for providers to control costs, encourage provider efficiency, and improve quality of care. The number of studies evaluating cost-effectiveness and quality improvement for specific pay-for-performance programs for physicians and hospitals is growing. However, less is known about how these programs are being received and implemented at the community level, especially during the early stages of development.

Method.
Study elicited viewpoints about pay for performance from representatives of commercial health plans, large employers (with >500 employees at the HSC site), hospitals, and large physician groups, using neutral open-ended questions about health plans' use of financial incentives to influence the quality or efficiency of care delivery. As a result, each effort (from a fledgling pilot development to a well-established program) received equal weight, resulting in potential overemphasis on modest efforts and too little detail for large well-established programs. In each community, we conducted interviews at the 3 largest health plans, based on enrollment, typically including a regional Blues plan, a national plan, and a local plan. Exceptions included 4 health plans in Orange County and 2 health plans each in Little Rock and Syracuse, communities in which a single plan dominated the market. We discussed health plan pay-for-performance activities with several executives from 35 health plans, including chief executive officers, marketing executives, and network contracting directors.

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