Report: Pricewaterhouse rates healthcares P4P as incomplete

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PricewaterhouseCoopers (PwC) released a report on the nation’s commercial health insurers Pay for Performance (P4P) programs, which stated that P4P has only served to temporarily conceal a fundamentally flawed payment system.

According to PwC’s Health Research Institute, P4P would currently receive an incomplete report card because the research firm found conflicting definitions of quality or cooperation on standards, resulting in an inflating number of diverse measures, and insufficient financial incentives to change physician behavior.

The PwC report, “Keeping Score,” compares P4P programs among commercial U.S. health insurers and includes interviews with top executives from 10 of the nation’s largest commercial payers. Collectively, these firms provide insurance for an estimated 39 million individuals.

Key findings from the interviews suggest:

  • There is tremendous variation among commercial plans’ P4P programs. 
  • Eight of the ten plans intend to expand their P4P programs even though they see P4P as insufficient in overcoming fundamental flaws in the existing payment system.
  • A cornucopia of quality metrics because health plans believe they have to tailor their scorecards to address specific needs, which increases administrative burdens.
  • While the U.S. government’s P4P system started with hospitals and is evolving toward physicians, private P4P has moved in the opposite direction.
  • Transparency of physician performance remains in its infancy because payers are cautious of publishing names of physicians with poor quality performance.
  • Commercial payers felt that physicians would need a reward equal to 10 percent of their total reimbursement to change their behavior.
  • Results from P4P are spotty and few plans have set up tracking methods.

In the report, PwC outlines some integral steps that the health plans can undertake to improve their P4P programs, including the systematic evaluation of P4P results and the evolution of outcomes-based performance measures.

A full copy of the report is available at