Measurement Of And Reward For Efficiency In California’s Pay-For-Performance Program

Abstract

Pay-for-performance (P4P) programs are expanding their purview from quality to include efficiency, and many consider the episode of care as the appropriate unit of measurement. Two years' experience by the California P4P program, however, reveals that the requisite claims data often are incomplete or poorly coded and that even large physician groups have too few patients experiencing most types of episodes to permit statistically valid measurement for public reporting and incentive payment. The California P4P program is shifting its efficiency focus to metrics not reliant on episode measurement while shifting episode measurement to supporting bundled payment for acute surgical and medical interventions.