The Business Case for Pediatric Asthma Quality Improvement
The Business Case for Pediatric Asthma Quality Improvement
Objective: To measure the return on investment (ROI) for a pediatric asthma pay-for-reporting intervention initiated by a Medicaid managed care plan in New York State.
Design: Practice-level, randomized prospective evaluation.
Setting: Twenty-five primary care practices providing care to children enrolled in the Monroe Plan for Medical Care (the Monroe Plan).
Participants: Practices were randomized to either treatment (13 practices, 11 participated) or control (12 practices).
Intervention: For each of its eligible members assigned to a treatment group practice, the Monroe plan paid a low monthly incentive fee to the practice. To receive the incentive, treatment group practices were required to conduct, and report to the Monroe Plan, the results of chart audits on eligible members. Chart audits were conducted by practices every 6 months. After each chart audit, the Monroe Plan provided performance feedback to each practice comparing its adherence to asthma care guidelines with averages from all other treatment group practices. Control practices continued with usual care.
Main Outcome Measures: Intervention implementation and operating costs and per member, per month claims costs. ROI was measured by net present value (discounted cash flow analysis).
Results: The ROI to the Monroe Plan was negative, primarily due to high intervention costs and lack of reductions in spending on emergency department and hospital utilization for children in treatment relative to control practices.
Conclusions: A pay-for-reporting, chart audit intervention is unlikely to achieve the meaningful reductions in utilization of high-cost services that would be necessary to produce a financial ROI in 2.5 years.
Financial incentives have been suggested as one method for improving primary care in low-income populations. Among common conditions affecting low-income primary care populations, pediatric asthma has been noted as a promising area for quality improvement because of the high cost associated with potentially avoidable asthma hospitalizations and emergency department (ED) visits. For example, a report by the Institute of Medicine in the USA identified significant gaps in care relative to existing evidence-based practice guidelines and thus designated asthma care as a quality improvement priority area.
Research evidence suggests that aligning provision of asthma care in accordance with guidelines can improve outcomes. For example, the use of asthma action plans has been shown to improve patient adherence to medications, patient self-management, caregiver management of asthma exacerbations and asthma control and thus result in a lower likelihood of ED visits or hospitalizations for asthma. However, despite being recommended for all patients, asthma action plans are not provided to many in community-based primary care settings.
One approach to encouraging guideline concordant care is through audit and feedback. A review of evidence on the effectiveness of audit and feedback interventions aimed at changing clinical practice found that improvements in clinical practice were likely under a variety of circumstances, though the improvements were relatively small. To test the effectiveness of financial incentives tied to audit and feedback, in 2008, a fully capitated Medicaid managed care plan in Rochester, New York—the Monroe Plan for Medical Care ('the Monroe Plan')—developed a pay-for-reporting program. The program was called the Pediatric Asthma Care Enhancement Project or PACE. Under PACE, physician practices received financial incentives to conduct chart audits for pediatric patients being treated for asthma. The results of the chart audits were subsequently fed back to the practices to make physicians more aware of their practice patterns.
This study reports the results of an evaluation of the business case for the Monroe Plan's pay-for-reporting intervention. Here, the business case is defined as a relatively short-term financial return on investment for the organization investing in the intervention. The idea of a business case was first introduced in health care by Leatherman and colleagues in 2003. Since then, it has garnered substantial attention as healthcare resources have become increasingly constrained. The concept of a business case is grounded in modern finance theory, suggesting that organizations will be more likely to undertake and/or sustain projects that can be shown to generate a positive (or at least break-even) financial return on investment as determined through discounted cash flow analysis. Thus, establishing a business case may be one key to widespread adoption and sustainability of proven quality interventions.
The PACE intervention aimed to increase providers' awareness of the concordance of their own care practices with accepted asthma care guidelines. Underlying the intervention was an assumption that providers would act on what they learned and increase their adherence to guidelines, for example, by providing asthma action plans, better monitoring asthma symptoms and prescribing appropriate asthma medications. This, in turn, would result in lower utilization of expensive services. Thus, the PACE intervention was hypothesized by the Monroe Plan to be effective in reducing ED use and hospitalizations, thereby resulting in cost savings. The Monroe Plan is fully capitated by Medicaid, but pays nearly all of its contracted providers' fee for service. Therefore, reductions in utilization and costs in excess of the costs of investing in and operating PACE would result in a positive return on investment for the Monroe Plan.
Abstract and Introduction
Abstract
Objective: To measure the return on investment (ROI) for a pediatric asthma pay-for-reporting intervention initiated by a Medicaid managed care plan in New York State.
Design: Practice-level, randomized prospective evaluation.
Setting: Twenty-five primary care practices providing care to children enrolled in the Monroe Plan for Medical Care (the Monroe Plan).
Participants: Practices were randomized to either treatment (13 practices, 11 participated) or control (12 practices).
Intervention: For each of its eligible members assigned to a treatment group practice, the Monroe plan paid a low monthly incentive fee to the practice. To receive the incentive, treatment group practices were required to conduct, and report to the Monroe Plan, the results of chart audits on eligible members. Chart audits were conducted by practices every 6 months. After each chart audit, the Monroe Plan provided performance feedback to each practice comparing its adherence to asthma care guidelines with averages from all other treatment group practices. Control practices continued with usual care.
Main Outcome Measures: Intervention implementation and operating costs and per member, per month claims costs. ROI was measured by net present value (discounted cash flow analysis).
Results: The ROI to the Monroe Plan was negative, primarily due to high intervention costs and lack of reductions in spending on emergency department and hospital utilization for children in treatment relative to control practices.
Conclusions: A pay-for-reporting, chart audit intervention is unlikely to achieve the meaningful reductions in utilization of high-cost services that would be necessary to produce a financial ROI in 2.5 years.
Introduction
Financial incentives have been suggested as one method for improving primary care in low-income populations. Among common conditions affecting low-income primary care populations, pediatric asthma has been noted as a promising area for quality improvement because of the high cost associated with potentially avoidable asthma hospitalizations and emergency department (ED) visits. For example, a report by the Institute of Medicine in the USA identified significant gaps in care relative to existing evidence-based practice guidelines and thus designated asthma care as a quality improvement priority area.
Research evidence suggests that aligning provision of asthma care in accordance with guidelines can improve outcomes. For example, the use of asthma action plans has been shown to improve patient adherence to medications, patient self-management, caregiver management of asthma exacerbations and asthma control and thus result in a lower likelihood of ED visits or hospitalizations for asthma. However, despite being recommended for all patients, asthma action plans are not provided to many in community-based primary care settings.
One approach to encouraging guideline concordant care is through audit and feedback. A review of evidence on the effectiveness of audit and feedback interventions aimed at changing clinical practice found that improvements in clinical practice were likely under a variety of circumstances, though the improvements were relatively small. To test the effectiveness of financial incentives tied to audit and feedback, in 2008, a fully capitated Medicaid managed care plan in Rochester, New York—the Monroe Plan for Medical Care ('the Monroe Plan')—developed a pay-for-reporting program. The program was called the Pediatric Asthma Care Enhancement Project or PACE. Under PACE, physician practices received financial incentives to conduct chart audits for pediatric patients being treated for asthma. The results of the chart audits were subsequently fed back to the practices to make physicians more aware of their practice patterns.
This study reports the results of an evaluation of the business case for the Monroe Plan's pay-for-reporting intervention. Here, the business case is defined as a relatively short-term financial return on investment for the organization investing in the intervention. The idea of a business case was first introduced in health care by Leatherman and colleagues in 2003. Since then, it has garnered substantial attention as healthcare resources have become increasingly constrained. The concept of a business case is grounded in modern finance theory, suggesting that organizations will be more likely to undertake and/or sustain projects that can be shown to generate a positive (or at least break-even) financial return on investment as determined through discounted cash flow analysis. Thus, establishing a business case may be one key to widespread adoption and sustainability of proven quality interventions.
The PACE intervention aimed to increase providers' awareness of the concordance of their own care practices with accepted asthma care guidelines. Underlying the intervention was an assumption that providers would act on what they learned and increase their adherence to guidelines, for example, by providing asthma action plans, better monitoring asthma symptoms and prescribing appropriate asthma medications. This, in turn, would result in lower utilization of expensive services. Thus, the PACE intervention was hypothesized by the Monroe Plan to be effective in reducing ED use and hospitalizations, thereby resulting in cost savings. The Monroe Plan is fully capitated by Medicaid, but pays nearly all of its contracted providers' fee for service. Therefore, reductions in utilization and costs in excess of the costs of investing in and operating PACE would result in a positive return on investment for the Monroe Plan.
