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Gotham Rumble: What Does the New York Public Hospital Debate Over P4P Say about Value and Incentives Right Now?

August 5, 2013
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A sometimes-heated discussion in New York City around physician pay for performance speaks to broader clinical transformation issues

Back in January, The New York Times published a fascinating report on a proposal for physician pay for performance within the 11-hospital New York City Health and Hospitals Corporation. As Anemona Hartocollis noted in the article,  New York City’s public hospitals organization has been negotiating the terms of the agreement with the physician’s union, and have been proceeding forward despite resistance among some doctors to the idea.

As the January Times report noted, the hospital system has come up with 13 performance indicators related to avoidable readmissions for congestive heart failure (CHF) and pneumonia, to speed of triage within emergency departments, to OR surgical start time efficiency, and to efficacy of inpatient discharge.

Not surprisingly, there has been resistance. In the January article, Hartocollis quotes an unidentified union official as saying, “To say we’ll stick a carrot in front of you and therefore you’re going to be a better doctor is a little disingenuous.”

What’s more, Hartocollis wrote this: “’The consequences in a complex system like a hospital for giving an incentive for one little piece of behavior are virtually impossible to foresee,’ said Dr. David U. Himmelstein, professor of public health at the City University of New York and a visiting professor at Harvard Medical School, who has reviewed the literature on performance incentives. ‘There are ways of gaming it without even outright lying that distort the meaning of the measure.’”

Well, not surprisingly, the backlash has grown since then. A March 6 report by Stuart Sia in the online publication The New York World noted that  “So-called pay-for-performance, announced in January, has set off a firestorm of debate in the medical community and is being closely watched across the country. New York City is the nation’s largest public health system, and 16 hospitals and diagnostic/treatment centers are affected.”

And if you read the entire report from The New York World, there’s even disagreement over whether, factually, physicians were involved in drafting the original plan for the initiative, or not.

Meanwhile, more broadly, Stuart Sia’s report notes this: “The union’s executive director, Dr. Frank Proscia, says the union is seeking to renegotiate the agreement. He maintains doctors need to be able to respond as medically appropriate, not with an eye toward their next bonus. Considering cost is important for both the hospital and the patient, says Dr. Proscia, who used to work as a psychiatrist at Queens Hospital center, but he says that translating that into a performance indicator that doctors are expected to meet ‘gets in the way of the doct-rpatient relationship.’ He says doctors should be able to provide patients with appropriate, individualized care—and for some patients, that means readmission within 30 days. This is especially the case for patients in public hospitals, which are ‘safety nets,’ catching the most marginalized and at-risk patients including the homeless, impoverished and mentally ill.”

I have about a million “on the one hand, on the other hand” thoughts here, but very briefly, what’s fascinating to me about all this back-and-forth is how entrenched different parties’ interests are around any issues involving value-based purchasing/pay-for-performance. The public hospitals are under intense pressure from the federal and state governments to rein in costs, even as they treat the most marginalized patients in our country. The physicians in public hospitals, to whom one must give tremendous credit simply for working in those institutions with all their immense challenges, feel very much put upon, and see value-based purchasing/pay for performance as yet another hassle that ultimately means less face time with patients and a more annoying workday. And the physician unions, of course, want to protect physician pay and prerogatives.

Of particular interest is the axe that Dr. Himmelstein has to grind. As many who follow healthcare policy issues know, he is famous as an advocate of replacing the current complex health insurance system in this country with a universal single-payer, government run system, something he openly advocated in a blog on the progressive Truthout website last year. So while he supports automation, Himmelstein believes that pay for performance is a band-aid on a broken incentives system in U.S. healthcare, and wants to speed the debate forward towards what he sees as the inevitable conclusion that single-payer is the only way to really fundamentally improve both quality and cost in healthcare.

Most people would agree that, politically, the chances that the U.S. Congress would legislate a single-payer health insurance system, given the tremendous difficult even of getting the Affordable Care Act, which preserves much of the current payment and coverage system, passed, are virtually zero. So the question remains: how can everyone come together to improve care quality through the measurement of outcomes and the creation of incentive programs that really reward physicians for doing the right things while not unduly burdening them with more bureaucracy and practice challenges, and ultimately make some of them quit practice altogether?