Statement of Karen Ignagni, President and Chief Executive Officer, America's Health Insurance Plans

Testimony Before the Subcommittee on Health
of the House Committee on Ways and Means

September 29, 2005

I. INTRODUCTION

Good afternoon, Madam Chairwoman and members of the subcommittee.  I am Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), which is the national trade association representing nearly 1,300 private sector companies providing health insurance coverage to more than 200 million Americans.  Our members offer a broad range of health insurance plans to employers, state and federal governments, and individuals, and also have demonstrated a strong commitment to participation in Medicare, Medicaid and other public programs.  

We appreciate this opportunity to testify, and to share our thoughts with you about H.R. 3617 and the importance of establishing payment incentives that promote quality, safety, and efficiency goals.  Indeed, this experience indicates that paying for quality and efficiency is a promising strategy for improving overall health care outcomes and advancing evidence-based medicine. 

Historically, health care practitioners have not been paid based on the quality of care they deliver.  Until recently, positive clinical outcomes, high patient satisfaction, and efficiencies have not been rewarded.  Instead, provider reimbursement – particularly in the Medicare program – has been based on the volume and technical complexity of services rendered.  This approach rewards any over-utilization and misuse of services, and results in higher payments when health care complications arise.  In effect, the current financing system creates disincentives to improve quality and efficiency.  More tests, more visits, and repeated hospital stays are rewarded, whereas efficiency, effectiveness and getting it right the first time are not. 

The flaws of the current system are recognized by physicians.  A 2004 survey^[1] of 400 primary care and specialty physicians, conducted on behalf of AHIP by Ayres, McHenry & Associates, found that 86 percent of physicians are concerned that the current payment system does not reward practitioners for providing high quality medical care.  Other findings of this survey indicate that 71 percent of physicians favor payments based in part on the quality of care they provide, and 62 percent believe that information on the quality of care provided by a physician should be made available to the public.

Additionally, this survey included other findings which may be relevant to the subcommittee’s discussions.  Specifically, an overwhelming majority of physicians indicate support for pay-for-performance programs if the performance measures were developed with physicians in that particular medical specialty (87 percent), if the performance measures were clearly communicated to physicians before they were used in payment arrangements (84 percent), and if the performance measures were evidence-based and grounded in science (83 percent).  

II. THE CASE FOR CHANGE

The U.S. health care system faces a number of significant challenges.  Rising health care costs are threatening to make health coverage unaffordable for more Americans, and are holding back efforts to meet the needs of the uninsured. 

Rising Costs

The most recent data from the Department of Health and Human Services (HHS) project that national health care spending increased by an estimated 7.5 percent in 2004.  Although this is the lowest rate of increase since 2000, health care costs still are growing faster than the overall economy and, as a result, large and small employers are finding it more difficult to provide or maintain coverage for their employees. 

AHIP and our members are encouraged about what we can do in the private sector to reduce growth in health care spending.  From 1994 through 1999, national health expenditures were in line with overall economic growth, because health insurance plans implemented a variety of tools to constrain costs.  This had a direct impact on the ability of employers to purchase affordable coverage for their employees.  Indeed, the Lewin Group estimated that up to 5 million people^[2] who otherwise would have been uninsured were able to receive coverage as a result of these costs being restrained. 

As the policy debate shifted away from containing costs, legislative proposals at both the federal and state levels focused on rolling back the mechanisms that were keeping health care affordable.  This led to a new cycle of accelerating health care costs with a deleterious effect on purchasers and consumers. 

Recognizing this challenge, our members have developed a new generation of cost containment tools that already are having a positive impact and showing promise for the future.  For example, the rates of increase in pharmaceutical expenditures have significantly declined as a result of our members’ implementation of programs to encourage greater use of generic drugs and other measures that encourage case management of chronic conditions.  The Center for Studying Health System Change has reported^[3] that growth in prescription drug spending fell to 7.2 percent in 2004, down from almost 20 percent in 1999. 

Quality Concerns

Through its landmark reports released in 1999, To Err is Human, and in 2001, Crossing the Quality Chasm, the Institute of Medicine (IOM) focused the nation on the critical need to improve health care quality and patient safety, coordinate chronic care, and support evidence-based medicine.  Variation in medical decision-making has led to disparities in the quality and safety of care delivered to Americans.  The 1999 IOM report^[4] found that medical errors could result in as many as 98,000 deaths annually, and a 2003 RAND study^[5] found that patients received only 55 percent of recommended care for their medical conditions. 

A wide range of additional studies indicate that Americans frequently receive inappropriate care in a variety of settings and for many different medical procedures, tests, and treatments.  Such inappropriate care includes the overuse, underuse or misuse of medical services.  Studies also show that patterns of medical care vary widely from one location to another, even among contiguous areas and within a single metropolitan area – with no association between higher intensity care and better outcomes.  For example:

• The Dartmouth Atlas of Health Care^[6] documents wide variation in the use of diagnostic and surgical procedures for patients with coronary artery disease, prostate cancer, breast cancer, diabetes, and back pain.  For example, the rates of coronary artery bypass graft (CABG) surgery were found to vary from a low of 2.1 per 1,000 persons in the Grand Junction, Colorado hospital referral area, to a high of 8.5 per 1,000 persons in the Joliet, Illinois region.  The Atlas’ most recent findings^[7] reveal wide variation in hospital care and outcomes for chronically ill Medicare patients.  For example, the length of hospital stays varied – depending on a patient’s geographic location – by a ratio of 2.7 to 1 for cancer patients and by a ratio of 3.6 to 1 for congestive heart failure patients. 
• The longstanding nature of quality problems in the U.S. health care system is evidenced by a 1999 article^[8] in The New England Journal of Medicine, which stated: “A number of studies have demonstrated overuse of health care services; for example, from 8 to 86 percent of operations – depending on the type – have been found to be unnecessary and have caused substantial avoidable death and disability.”  A more recent study, published in the June 1, 2005 edition of the Journal of the American Medical Association[9], indicated that 93 percent of practicing physicians in the state of Pennsylvania reported practicing defensive medicine – with 43 percent reporting that they used imaging technology in clinically unnecessary circumstances. 
• The National Committee for Quality Assurance (NCQA)^[10] documents the state of health care quality annually, reporting in 2004 that “enormous ‘quality gaps’” persist as “the majority of Americans still receive less than optimal care” with between 42,000 and 79,000 avoidable deaths occurring each year.  While health care quality is improving in some areas, the health care system remains “deeply polarized, delivering excellent care to some people, and generally poor care to many others.” 

These research findings clearly indicate the need for innovative strategies to improve quality and efficiency throughout the U.S. health care system.  Decisive action is needed to address these wide-ranging variations in medical decision-making, as well as the overuse, underuse and misuse of health care services.  While we understand that the subject of this hearing is paying for quality, we have thoughts about other strategies that could support these efforts and would be delighted to share them with the subcommittee. 

III. WHERE WE GO FROM HERE

We need to move toward a health care system that rewards physicians, hospitals and other health care practitioners for high quality performance.  Although the private sector is implementing programs to meet this challenge, it is time for Medicare and other federal programs to make similar changes and reward health care practitioners for best practices and improved patient outcomes.  This would be an important step toward advancing an evidenced-based health care system that yields better health outcomes and greater value for beneficiaries. 

We applaud you for introducing legislation – H.R. 3617, the “Medicare Value-Based Purchasing for Physicians Act of 2005” – to provide incentives to physicians to provide high quality health care.  We support the objectives of improving quality, efficiency, patient safety and satisfaction, and believe that a strong commitment to these goals will result in benefits to a variety of key stakeholder groups.   Consumers benefit from public disclosure and the opportunity to select the best practitioners.  Clinicians who perform well will be sought after, and all clinicians will benefit from receiving feedback on how their performance compares to their peers.  For public programs, transitioning to a payment-for-quality system will improve care and shrink the wide variation in practice patterns around the country. 

AHIP’s members are committed to working with stakeholders across the health care community, particularly health care professionals who work on the frontlines every day, to develop a strategy that accounts for the quality of care delivered to patients.  In November 2004, AHIP’s Board of Directors demonstrated this commitment by approving principles that are in sync with the goals underlying H.R. 3617 and at the same time offer additional thoughts for advancing quality-based payment systems.  AHIP’s principles include eight key elements:

• Programs that reward quality performance should promote medical practice that is based on scientific evidence and aligned with the six aims of the IOM for advancing quality (safe, beneficial, timely, patient-centered, efficient, and equitable).
• Research is urgently needed to inform clinical practice in priority areas currently lacking a sufficient evidence-based foundation.
• The involvement of physicians, hospitals and other health care professionals in the design and implementation of programs that reward quality performance is essential to their feasibility and sustainability.
• Collaboration with key stakeholders, including consumers, public and private purchasers, providers, and nationally recognized organizations, to develop a common set of performance measures – process, outcome and efficiency measures – and a strategy for implementing those measures will drive improvement in clinically relevant priority areas that yield the greatest impact across the health care system. 
• Reporting of reliable, aggregated performance information will promote accountability for all stakeholders and facilitate informed consumer decision-making. 
• The establishment of an infrastructure and appropriate processes to aggregate – across public and private payers – performance information obtained through evidence-based measures will facilitate the reporting of meaningful quality information for physicians, hospitals, other health care professionals, and consumers.
• Disclosure of the methodologies used in programs that reward quality performance will engage physicians, hospitals, and other health care professionals so they can continue to improve health care delivery. 
• Rewards, based upon reliable performance assessment, should be sufficient to produce a measurable impact on clinical practice and consumer behavior, and result in improved quality and more efficient use of health care resources.

IV. IMPORTANCE OF UNIFORM PERFORMANCE MEASUREMENT,
DATA AGGREGATION AND REPORTING

Performance Measurement

A critically important step in moving forward with programs that reward quality performance is the development of a uniform, coordinated strategy for measuring, aggregating and reporting clinical performance.  Disseminating information derived from aggregated performance data – which provides stakeholders with a more comprehensive view of performance across marketplaces – would yield benefits on several levels.  Consumers would be allowed to make more informed decisions about their health care treatments.  Physicians, hospitals and other health care professionals would be better able to improve the quality of care they provide.  Purchasers would receive greater value for their investment in health care benefits.  Health insurance plans could continue to develop innovative products that meet consumer and purchaser needs.

Unfortunately, the nation lacks a uniform and coordinated strategy for measuring and aggregating physician performance data.  While many different private and public sector groups have attempted to step up to the challenge by designing models for assessing performance and reporting data, the proliferation of multiple, uncoordinated and sometimes conflicting initiatives has significant unintended consequences for different stakeholders.  For example, duplicative efforts: 

• unnecessarily burden physicians, other clinicians, and health insurance plans with different data requests, shifting focus away from quality and efficiency improvement;
  
• create confusion among consumers due to different information that is being publicly reported; and
  
• detract from collective efforts to efficiently make decisions and design programs that meet broad quality goals.

Perhaps most important, however, are the adverse effects numerous initiatives have on patient care and the health care system as a whole.  Without a uniform approach to select performance measures for public reporting, they will continue to divert limited resources and focus away from establishing clear priorities and reaching goals. 

To create uniformity across purchasers, coalitions and consulting firms, AHIP has been working in a collaborative effort with the Ambulatory Care Quality Alliance (AQA), whose membership also includes the American College of Physicians (ACP), the American Academy of Family Physicians (AAFP), the American Medical Association, the American Osteopathic Association, the Society for Thoracic Surgery, the American College of Surgeons, AARP, the National Partnership for Women and Families, the Pacific Business Group on Health, and the Agency for Healthcare Research and Quality (AHRQ), with the support of the Centers for Medicare & Medicaid Services (CMS).  Together, these organizations are working to identify what should be measured for physician performance – both quality and efficiency – and develop an effective and efficient data aggregation model that would comprehensively assess provider performance. 

The AQA recently reached consensus on a common set of 26 ambulatory care performance measures.  These measures are grouped under eight separate categories: (1) prevention; (2) coronary artery disease; (3) heart failure; (4) diabetes; (5) asthma; (6) depression; (7) prenatal care; and (8) overuse or misuse of medical services.  Many of the measures under these categories are “bundled” measures – i.e., multiple measures which if used collectively, have the potential to more comprehensively and accurately assess physician performance and provide improved outcomes for patients.  

These measures are intended to serve as a “starter set” that will provide clinicians, consumers, and purchasers with a set of quality indicators that can be used for quality improvement, public reporting, and pay-for-performance programs.  Over the next several months, AQA will be seeking to expand this starter set to include efficiency, patient experience, non-primary care and other key measures.    

Data Aggregation

In addition to working toward a strategy for performance measurement, AQA is developing a uniform data aggregation strategy.  The aggregation model developed by this alliance would include the following key attributes:

• transparency with respect to framework, process and rules;
• a process that allows provider performance to be compared against both national and regional benchmarks and makes the data useful for physicians to improve the quality and efficiency of care they provide to their patients;
  
• collection of both public and private data so that physician performance can be assessed as comprehensively as possible;
• a process that facilitates public reporting to consumers of user-friendly and actionable information about physician quality and efficiency;
  
• standardized and uniform rules associated with measurement and data collection; and
  
• protection of privacy and confidentiality of data while ensuring necessary access to appropriate stakeholders.
  
  

Launching Pilots

A first step toward achieving this model is to implement pilot projects that combine public and private payer data, leverage the experience of existing aggregation efforts, and evaluate the most effective processes for measuring physician-level performance.  AQA – which at its last meeting reached consensus on the need and value for pilots – is currently seeking to secure both public and private funding to implement such pilots in 2006.

Key elements of the proposed pilots would include:

• assessment of clinical quality, efficiency and patient experience;
  
• collection and aggregation of Medicare claims data and private sector data from multiple sources;
  
• exploration of both existing and new methods for collecting, submitting and sharing data from physicians' medical practices;
  
• dissemination of measurement information.

The proposed pilots would address numerous important issues, including the most effective methods for linking measures, and data from multiple sources; the most effective ways to address methodological issues (e.g., sample size for validating physician performance, how to attribute performance to particular physicians, and which risk-adjustment model is most effective); and what type of information should be reported back to physicians and other stakeholders.  We believe that these pilot efforts could inform the subcommittee’s discussions, and we hope you will be supportive of this broad effort. 

Consumer Reporting

AQA is also exploring strategies for reporting reliable and useful quality information to consumers, providers and other stakeholders.  The Alliance recently developed fundamental principles for reporting with the objectives of facilitating more informed decision-making about health care treatments and investment, facilitating quality improvement, and informing providers of their performance.  Two AQA committees are working on this issue – one specifically addressing the issue raised in H.R. 3617 about how to communicate these data to physicians; and the other focusing on how to communicate this information to consumers.  We hope this effort, which involves a broad range of stakeholder groups, also will be helpful to your discussions. 

The AQA will continue to move forward in the areas of measurement, aggregation and reporting, and encourage various stakeholders to become involved in this important effort to improve health care quality and patient safety.  The work currently being undertaken by the AQA, including the development of a common set of measures and pilot projects which aggregate public and private sector data, will help us reach our goals of identifying quality gaps, controlling skyrocketing cost trends, reducing confusion and burdens in the marketplace, and otherwise addressing the challenges of the current health care system. 

V. COMMENTS ON H.R. 3617

We appreciate this opportunity to offer for your consideration comments on key elements of H.R. 3617. 

A. Characteristics and Fairness of Performance Measures

Health plans strongly support the criteria set forth in H.R. 3617 for performance measures.  Many of these characteristics – such as the requirement that measures should be evidence-based, valid, and not overly burdensome to collect – are consistent with the criteria endorsed by the Ambulatory Care Quality Alliance (AQA).  Similarly, the other criteria set out in the bill – such as outcome measures; process measures; structural measures (e.g., use of health information technology); measures of overuse, misuse and underuse; and measures that assess the relative use of resources, services or expenditures – have been recognized by the AQA as critical areas that need to be addressed.  We, at the same time, urge the committee to consider supporting other important characteristics endorsed by the AQA, including that measures be aligned with the IOM's six aims for improvement (safe, effective, patient-centered, timely, efficient and equitable), that physician-level measures should as much as possible complement measures in other health care settings and that measures should as much as possible be constructed so as to result in minimal or no unintended harmful consequences (e.g., adversely impact access to care).

Health insurance plans agree that performance measures should be applied and implemented fairly.  This requires that measures be appropriately risk-adjusted to take into account differences in individual health status and conditions, and that an adequate sample be used to ensure a statistically valid assessment of physician performance.  Fairness also requires the use of outcomes measures, as well as measures that reflect processes of care that physicians can influence (e.g., measures that assess the appropriate treatment for children with upper respiratory infection and the appropriate testing for children with pharyngitis). 

B. Selection Process for Measures

A good deal of work is currently being done to create a robust measurement set that can be used on a uniform basis for performance-based payments throughout the health care system.  The National Committee for Quality Assurance (NCQA) has been working with the health plan and purchaser communities to create programs, such as Bridges to Excellence, that align incentives around higher quality, efficient care.   The AMA Physician Consortium for Performance Improvement, which includes representation from 70 national medical specialty societies, has been working to develop evidence-based clinical performance measures to improve patient care and foster accountability. The National Quality Forum (NQF) reviews the work of these organizations and other entities in an attempt to reach consensus on a preferred set of performance measures and quality reporting.   The Ambulatory Care Quality Alliance, (AQA) which includes the involvement of NCQA, the AMA Consortium and NQF – along with CMS and AHRQ – strives to reach consensus across purchasers, physicians, consumers and health plans on the most appropriate performance measures that have been endorsed by NQF or validated through experience for immediate use.  The AQA currently is working to gain consensus on common rules and logic for efficiency measures, as well as targeting those performance measures that address underuse, overuse and misuse.  Given the depth and breadth of ongoing work, we believe it is essential for the Secretary to work with these groups in selecting quality and efficiency measures as opposed to reinventing the wheel. The selection of measures not currently being utilized by the private sector will create unnecessary inconsistency, add confusion, and impose an additional burden on physicians.  By contrast, the collaborative efforts of the AQA are paving the way for greater standardization and uniformity in value-based purchasing initiatives. 

C. Periodic Revision of Measures

It is important that quality and efficiency measures be evaluated periodically for their relevance and ability to improve care.  To evaluate improvements in care, trending data is important; for example, a minimum of two years of data are needed to evaluate provider efficiency.  Thus, periodic review and revision should occur in a timely period.  However, as new evidence becomes available, these measures should be revised as soon as possible to reflect such evidence, while not being disruptive to data collection efforts.

D. Disclosure and Reporting

Public reporting will encourage quality performance.  While our members believe that physicians should be involved actively in the selection of measures and reviewing information before it is disclosed, such processes should ensure the timely provision of meaningful information.

VI. THE PRIVATE SECTOR’S EXPERIENCE  

Your proposal for a value-based purchasing program in Medicare is similar in many respects to initiatives that many private sector health insurance plans have implemented in recent years.  Health insurance plans have long been at the forefront of developing innovative payment arrangements that have promoted population-based health care, improved care for the chronically ill, and encouraged prevention. 

Many of our members currently are offering financial awards to physicians in the form of increased per-member-per-month payments or non-financial rewards in the form of public recognition, preferential marketing or streamlined administrative procedures.  Additionally, some plans are offering consumers reduced co-payments, deductibles, and/or premiums in exchange for using providers deemed to be of higher quality, based on specific performance measures.  The categories of performance measures most commonly reported include clinical quality, utilization experience/efficiency, patient satisfaction, and information technology infrastructure.  Specific examples of these initiatives are outlined in Appendix A.     

While still in their early stage in some markets, initiatives that reward quality and tier clinicians according to how they achieve quality goals have an early track record in several states, including California, Massachusetts, and Michigan.  What we have learned is that quality and efficiency measures go hand in hand. 

Based on the experiences of our members, we know that programs for rewarding quality performance have a number of common features: 

• Reason for Implementation:  Across the board, the programs seekto enhance and sustain clinical quality, facilitate excellence across provider networks, and improve and promote patient safety.
• Role of Clinicians:  Nearly all plans indicate that clinicians are actively involved in key aspects of rewarding quality performance programs, including program development, selection of performance measures, and determination of how rewards are linked to provider performance. 
• Emphasis on Specific Measures:  In rewarding quality performance programs for physicians and medical groups, achieving clinical quality goals plays the most significant role in the formula for determining financial rewards.  In programs for hospitals, utilization experience/efficiency and patient safety objectives tend to play equivalent roles.
• Consumer Incentives:  Efforts are being launched to encourage consumers through reduced co-payments, deductibles, and/or premiums to use providers that are achieving quality performance.  

VII. CONCLUSION

Thank you for the opportunity to testify on this important issue.  Today’s health care system is at a critical crossroads.  We need to work on the three interrelated goals of controlling costs, improving quality, and expanding access.  Progress on cost containment and quality improvement can free up resources to expand access to health care coverage for all Americans. 

We applaud the subcommittee for focusing on value-based purchasing as an important step toward improving the quality, safety and efficiency of the U.S. health care system, and we look forward to working closely with you to achieve these goals. 

Appendix A

SPECIFIC INITIATIVES FOR REWARDING QUALITY PERFORMANCE   

To provide a better understanding of pay-for-performance initiatives in the private sector, we are providing brief examples of programs being implemented by our members across the country. 

• Aetnahas launched a network of specialist physicians who demonstrate effectiveness based on certain clinical measures, such as hospital readmission rates over a 30-day period, reduced rates of unexpected complications by hospitalized patients, and efficient use of health care resources.  Consumers who choose these specialists benefit through lower co-payments, and providers benefit through increased patient volume. The Aexcel network, which is currently available in nine markets across the country, includes physicians in twelve medical specialties – cardiology, cardiothoracic surgery, gastroenterology, general surgery, obstetrics/gynecology, orthopedics, otolaryngology, neurology, neurosurgery, plastic surgery, vascular surgery, and urology. 
• CIGNA HealthCare of California participates in the Integrated Healthcare Association’s (IHA) quality incentive program.  CIGNA rewards the top 50 percent of contracted physician groups for meeting each of the IHA clinical and member satisfaction metrics.  Top-performing groups in all components of the Rewards Program are eligible to receive a minimum of $1.60 per member per month.  Payment is based upon the total annual member months of the group’s population.  In the first year of the program, the payout in California for IHA was $4 million.
• Health Net of Connecticut has entered into a partnership with the Connecticut State Medical Society-Individual Practice Association (CSMS-IPA) to establish a “P4Q” program that will reward eligible physicians for providing high quality, cost-effective care.  The P4Q program, announced in July 2005, includes both primary care providers and specialists, providing them with an opportunity to earn bonus compensation beyond their current fee-for-service reimbursement.  Diabetes treatment, breast cancer screenings and childhood immunizations are included among the areas where physicians will be rewarded for taking preemptive action.  The first bonuses are expected to be paid out in the second quarter of 2006, based on performance measures for 2005. 
• HealthPartners has implemented an Outcomes Recognition Program that offers annual bonuses to primary care clinics that achieve superior results in effectively promoting health and preventing disease.  Since 1997, this program has awarded more than $3.95 million in bonuses to primary care groups that meet performance goals focusing on diabetes, coronary artery disease, tobacco cessation, generic prescribing, and consumer satisfaction. 
• Highmark Blue Cross Blue Shield has adopted a Quality Incentive Payment System that rewards primary care physicians for demonstrating improvement in measures for preventive screenings, treatment of chronic conditions, and other quality and service issues.  In the tenth year of the program (2003), more than $12 million in bonuses were paid to primary care physicians who exceeded the average performance measure on various indicators. 
• Independent Health uses a Quality Management Incentive Award Program that involves a physician advisory group in developing performance targets for key issues such as patient satisfaction, emergency room utilization/access, office visits, breast and colorectal screening, immunizations, and treatment for diabetes and asthma.  In addition to paying bonuses to physicians who exceed these targets, this program has documented significant improvements in clinical care for enrollees. 
• PacifiCare Health Systems has developed a Quality Index® profile that uses clinical, service, and data indicators to rank medical groups.  Enrollees pay lower co-payments for office visits if they select physicians from a “value network” of higher quality, lower cost providers.  Additionally, PacifiCare’s Quality Incentive Program incorporates a subset of the Quality Index^® profile and has demonstrated an average improvement of 20 percent in 17 of 20 measures, with rewards to high performing physicians exceeding $15 million in the past three years.
• WellPoint’s quality programs provide increased reimbursement to hospitals and physicians based, in part, on achieving improved quality measures.  For example, hospitals selected for Anthem Blue Cross and Blue Shield's Coronary Services Centers program in Indiana, Kentucky, and Ohio must meet stringent clinical quality standards for patient care and outcomes for certain cardiac procedures.  Anthem Blue Cross and Blue Shield of Virginia's Quality-in-Sights Hospital Incentive Program (QHIP) rewards hospitals for improvements in patient safety, patient health, and patient satisfaction.  The 16 hospitals that participated in the first year of QHIP in 2004 are receiving a total of $6 million for actively working to implement nationally recognized care and safety practices that can save lives.  Blue Cross of California has a comprehensive physician pay-for-performance program that paid $57 million in bonus payments to 134 medical groups based on quality criteria in 2003.  Blue Cross of California also has a PPO Physician Quality and Incentive Program (PQIP) that allows more than 4,000 physicians in six counties in the San Francisco area to receive financial bonuses for superior performance on clinical quality, service quality, and pharmacy measures. 

[1] “National Survey of Physicians Regarding Pay-for-Performance,” Ayres, McHenry & Associates, Inc., September/October 2004

[2] The Lewin Group LLC, Managed Care Savings for Employers and Households: 1990 through 2000; 1997

[3] Strunk, B., Ginsburg, P., & Cookson, J. (June 2005).  Tracking Health Care Costs: Spending Growth Stabilizes at High Rate in 2004.  Center for Studying Health System Change. Data Bulletin No. 29.

[4] “To Err is Human,” Institute of Medicine, 1999

[5] “The Quality of Health Care Delivered to Adults in the United States.,” Elizabeth A. McGlynn, RAND, June 25, 2003

[6] Center for the Evaluative Clinical Sciences, Dartmouth Medical School, The Dartmouth Atlas of Health Care, “The Quality of Medical Care in the United States: A Report on the Medicare Program,” 1999

[7] Fisher, E., Health Affairs, October 7, 2004

[8] Dr. Bodenheimer, T., The New England Journal of Medicine, Vol. 340, No. 6, pp. 488-492, 1999

[9] “Defensive Medicine Among High-Risk Specialist Physicians in a Volatile Malpractice Environment,” Journal of the American Medical Association, June 1, 2005.

[10] NCQA, The State of Health Care Quality: 2004, 2004