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Latest American Export: Pay for Performance

The pay-for-performance concept, which is making inroads throughout the United States, has also made a leap "across the pond" to England. First family practitioners there were affected. Now hospitals are as well.

Although many physicians are less than enchanted with pay for performance—the concept of paying hospitals and physicians for adhering to practice guidelines and meeting standards of quality improvement—the concept has received the endorsement of many members of Congress.

As a result, the federal Centers for Medicare and Medicaid Services (CMS) has received money to launch various pay-for-performance (P4P) demonstration projects.

For example, CMS and Premier Inc. of San Diego joined forces in 2003 to launch a P4P demonstration project in some 250 American hospitals. The goal was to determine whether economic incentives could improve the quality of patient care in them. In 2006 CMS launched a three-year P4P program to encourage physicians who treat chronically ill patients to adhere to specific quality-control guidelines (Psychiatric News, November 17, 2006). The Tax Relief and Healthcare Act of 2006 authorizes CMS's Physician Quality Reporting Initiative, which is getting under way this year (Psychiatric News, December 21, 2007).

P4P is getting a foothold in England as well. In 2004 England's National Health Service implemented a P4P contract with family practitioners (Psychiatric News, December 15, 2006). And now the North West Strategic Health Authority, which is part of England's National Health Service, has commissioned Premier Inc. of San Diego to implement a P4P demonstration project in hospitals and other health-care sites in northwest England.

According to Mike Farrar, chief executive of the North West Strategic Health Authority, "We have carried out an extensive search to identify the most effective health services offered around the globe, and we have teamed up with a world leader that has already delivered dramatic results in the United States."

The P4P demonstration project in northwest England, called "Advancing Quality," will first focus on improving the quality of care in the five areas targeted by the American project—heart attacks, heart bypass, heart failure, hip and knee replacements, and pneumonia. If those efforts prove successful, the project might then be expanded to other areas of hospital care.

Premier will work with hospitals and the ambulance service in northwest England to set up data collection and processing systems. The structure of the financial-incentive scheme is currently being developed. There are no plans to penalize hospitals that do not meet quality-care standards.

The northwest region of England includes some 7 million people, both in cities and in rural areas, and with a wide range of incomes. Some of the major health challenges in the region are cancer, excessive alcohol use, obesity, and teenage pregnancies.

More information about the "Advancing Quality" demonstration project is posted at <www.northwest.nhs.uk/about_us/> and <www.premierinc.com>.

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