Getting real performance out of pay-for-performance

CONTEXT

Most private and public health insurers are implementing pay-for-performance (P4P) programs in an effort to improve the quality of medical care. This article offers a paradigm for evaluating how P4P programs should be structured and how effective they are likely to be.

METHODS

This article assesses the current comprehensiveness of evidence-based medicine by estimating the percentage of outpatient medical spending for eighteen medical processes recommended by the Institute of Medicine.

FINDINGS

Three conditions must be in place for outcomes-based P4P programs to improve the quality of care: (1) health insurers must not fully understand what medical processes improve health (i.e., the health production function); (2) providers must know more about the health production function than insurers do; and (3) health insurers must be able to measure a patient's risk-adjusted health. Only two of these conditions currently exist. Payers appear to have incomplete knowledge of the health production function, and providers appear to know more about the health production function than payers do, but accurate methods of adjusting the risk of a patient's health status are still being developed.

CONCLUSIONS

This article concludes that in three general situations, P4P will have a different impact on quality and costs and so should be structured differently. When information about patients' health and the health production function is incomplete, as is currently the case, P4P payments should be kept small, should be based on outcomes rather than processes, and should target physicians' practices and health systems. As information improves, P4P incentive payments could be increased, and P4P may become more powerful. Ironically, once information becomes complete, P4P can be replaced entirely by "optimal fee-for-service."

Valuing reductions in on-the-job illness: 'presenteeism' from managerial and economic perspectives

This paper reports on a study of manager perceptions of the cost to employers of on-the-job employee illness, sometimes termed 'presenteeism,' for various types of jobs. Using methods developed previously, the authors analyzed data from a survey of more than 800 US managers to determine the characteristics of various jobs and the relationship of those characteristics to the manager's view of the cost to the firm of absenteeism and presenteeism. Jobs with characteristics that suggest unusually high cost (relative to wages) were similar in terms of their 'absenteeism multipliers' and their 'presenteeism multipliers.' Jobs with high values of team production, high requirements for timely output, and high difficulties of substitution for absent or impaired workers had significantly higher indicators of cost for both absenteeism and presenteeism, although substitution was somewhat less important for presenteeism.

A preliminary risk assessment of organochlorines accumulated in fish to the Indo-Pacific humpback dolphin (Sousa chinensis) in the Northwestern waters of Hong Kong

The Indo-Pacific humpback dolphin is considered threatened due to several factors including pollution in Hong Kong and the risks due to consumption of fish tainted with polychlorinated biphenyls (PCBs) and organochlorine pesticides were assessed. Six species of fish Collichthys lucida, Pseudosciaena crocea, Johnius sp., Thryssa sp., Mugil sp. and Trichiurus sp., which comprise the main prey species of humpback dolphins were collected for analyses. Risks due to total PCBs, total TEQs, PCB 118 and the pesticides were assessed with the use of toxicity reference values as the threshold reference benchmarks. The calculated risk quotients (RQs) showed that the risks associated with organochlorines were generally low. The highest RQ was associated with total TEQs suggesting that dioxin-like PCBs may pose the highest risk to the dolphins. The HCHs, total PCBs and heptachlor had comparatively high RQs and thus they should also be the priority organochlorines that would require further investigation.

Phase I study of aerosolized SLIT cisplatin in the treatment of patients with carcinoma of the lung

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Background: Investigate the safety and pharmacokinetics of aerosolized SLIT (Sustained release Lipid Inhalation Targeting) cisplatin in patients with carcinoma of the lung. Methods: In this single-center, dose-escalating study patients received SLIT cisplatin for a maximum of 6 cycles. The dose level defines the cycle duration and number of inhalations per day. Safety data, including laboratory parameters, adverse events, pulmonary function tests, bronchial responsiveness, and radiographic imaging were collected and analyzed for all patients in order to determine toxicity. Pharmacokinetic data was collected during the first treatment course. Results: 17 patients and 1 patient on compassionate use received treatment. SLIT cisplatin was well tolerated. No dose limiting toxicity was observed. The maximum delivered dose was 60 mg/m2 in a 2 week schedule and 40 mg/m2 on a weekly schedule. Safety data showed no hematological toxicity, nephrotoxicity, ototoxicity, or neurotoxicity. Common side effects were nausea (66.7%), vomiting (44.4%), dyspnea (66.7%), hoarseness (27.8%), and fatigue (66.7%). Pharmacokinetic data showed very low systemic concentrations only at the higher doses. CTC grade-2 decrease in FEV1 and DLCO occurred both in 2 patients after 1 course, and grade-1 decrease in FEV1 and DLCO in 6 and 4 patients respectively. Best overall response was stable disease in 13 patients, while 4 had progressive disease (1 patient received only one course). These results indicate that high doses of aerosolized SLIT cisplatin can be inhaled safely. The therapeutic effect of the formulation will be tested in a phase II study. Conclusions: Inhaled SLIT cisplatin was found to be feasible and safe in patients with lung cancer.

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Phase II pilot study of neoadjuvant cetuximab in combination with cisplatin and gemcitabine in patients with resectable IB-IIIA non small cell lung cancer

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Background: Adjuvant and neoadjuvant chemotherapy play a role in optimising long term outcome of patients with resectable non small cell lung cancer (NSCLC). The epidermal growth factor receptor (EGFR) is a receptor tyrosine kinase which is overexpressed NSCLC. Cetuximab is a monoclonal antibody which attaches to the extracellular domain of the EGFR preventing ligand binding. Preclinical data and phase II evidence in advanced NSCLC suggest cetuximab potentiates the effect of conventional cytotoxic agents. Methods: Patients with histologically confirmed resectable stage IB-IIIA NSCLC and adequate end-organ function, giving informed written consent are eligible. Three weekly cycles of cisplatin 80 mg/m2 D1, gemcitabine 1250 mg/m2 D1,D8 and cetuximab loading dose of 400 mg/m2 on first infusion, thereafter weekly 250 mg/m2 are used. The primary endpoint is response rate (radiological and pathological). Secondary endpoints are safety and tolerability of the combination, resection rate following therapy, overall survival and relapse free survival. In addition, molecular prognostic and predictive biomarkers of response are being assessed. Sequential samples of tissue, plasma, serum and white blood cells are being collected before, during and after therapy on all patients. Results: 16 patients have been recruited to date. (10 men, 6 women). Median age 66 (range 29–76). 3 patients stage I, 4 patients, stage II, 9 patients stage III. 11 have completed treatment. Response (RECIST guidelines); PR - 6 patients, SD - 4 patients, PD - 1 patient. The most common toxicity was skin rash (100%). Grade 3/4 toxicities were neutropenia (73%), thrombocytopenia (45%). There were 2 grade 3 and 2 grade 4 cardiovascular toxicities in patients with significant co-morbid cardiovascular histories. Conclusion: The response rate is consistent with that established for neoadjuvant chemotherapy. Ongoing biomarker studies may identify those patients most likely to benefit from induction treatment.

No significant financial relationships to disclose.

Measuring the effects of work loss on productivity with team production

Using data from a survey of 800 managers in 12 industries, we find empirical support for the hypothesis that the cost associated with missed work varies across jobs according to the ease with which a manager can find a perfect replacement for the absent worker, the extent to which the worker functions as part of a team, and the time sensitivity of the worker's output. We then estimate wage 'multipliers' for 35 different jobs, where the multiplier is defined as the cost to the firm of an absence as a proportion (often greater than one) of the absent worker's daily wage. The median multiplier is 1.28, which supports the view that the cost to the firm of missed work is often greater than the wage.

Employer health insurance offerings and employee enrollment decisions

OBJECTIVE

To determine how the characteristics of the health benefits offered by employers affect worker insurance coverage decisions.

DATA SOURCES

The 1996-1997 and the 1998-1999 rounds of the nationally representative Community Tracking Study Household Survey.

STUDY DESIGN

We use multinomial logistic regression to analyze the choice between own-employer coverage, alternative source coverage, and no coverage among employees offered health insurance by their employer. The key explanatory variables are the types of health plans offered and the net premium offered. The models include controls for personal, health plan, and job characteristics.

PRINCIPAL FINDINGS

When an employer offers only a health maintenance organization married employees are more likely to decline coverage from their employer and take-up another offer (odds ratio (OR)=1.27, p<.001), while singles are more likely to accept the coverage offered by their employer and less likely to be uninsured (OR=0.650, p<.001). Higher net premiums increase the odds of declining the coverage offered by an employer and remaining uninsured for both married (OR=1.023, p<.01) and single (OR=1.035, p<.001) workers.

CONCLUSIONS

The type of health plan coverage an employer offers affects whether its employees take-up insurance, but has a smaller effect on overall coverage rates for workers and their families because of the availability of alternative sources of coverage. Relative to offering only a non-HMO plan, employers offering only an HMO may reduce take-up among those with alternative sources of coverage, but increase take-up among those who would otherwise go uninsured. By modeling the possibility of take-up through the health insurance offers from the employer of the spouse, the decline in coverage rates from higher net premiums is less than previous estimates.

The assessment of chronic health conditions on work performance, absence, and total economic impact for employers

OBJECTIVE

The objective of this study was to determine the prevalence and estimate total costs for chronic health conditions in the U.S. workforce for the Dow Chemical Company (Dow).

METHODS

Using the Stanford Presenteeism Scale, information was collected from workers at five locations on work impairment and absenteeism based on self-reported "primary" chronic health conditions. Survey data were merged with employee demographics, medical and pharmaceutical claims, smoking status, biometric health risk factors, payroll records, and job type.

RESULTS

Almost 65% of respondents reported having one or more of the surveyed chronic conditions. The most common were allergies, arthritis/joint pain or stiffness, and back or neck disorders. The associated absenteeism by chronic condition ranged from 0.9 to 5.9 hours in a 4-week period, and on-the-job work impairment ranged from a 17.8% to 36.4% decrement in ability to function at work. The presence of a chronic condition was the most important determinant of the reported levels of work impairment and absence after adjusting for other factors (P < 0.000). The total cost of chronic conditions was estimated to be 10.7% of the total labor costs for Dow in the United States; 6.8% was attributable to work impairment alone.

CONCLUSION

For all chronic conditions studied, the cost associated with performance based work loss or "presenteeism" greatly exceeded the combined costs of absenteeism and medical treatment combined.

The financial performance of integrated health organizations

This study examines the impact of integration strategies on the financial performance of hospitals, physicians, and health plans over time. Results from a study of 36 large integrated health organizations (IHOs) suggest that financial performance is adversely affected by the scale of investment in integration but not necessarily by the timing or sequencing of the investments made. The results also suggest that some integration strategies have more detrimental effects on financial performance than do others. Finally, the results show that centralized integrative structures appear more financially successful than are less centralized structures.

Productivity in pharmaceutical-biotechnology R&D: the role of experience and alliances

Using data on over 900 firms for the period 1988-2000, we estimate the effect on phase-specific biotech and pharmaceutical R&D success rates of a firm's overall experience, its experience in the relevant therapeutic category, the diversification of its experience across categories, the industry's experience in the category, and alliances with large and small firms. We find that success probabilities vary substantially across therapeutic categories and are negatively correlated with mean sales by category, which is consistent with a model of dynamic, competitive entry. Returns to experience are statistically significant but economically small for the relatively straightforward phase 1 trials. We find evidence of large, positive and diminishing returns to a firm's overall experience (across all therapeutic categories) for the larger and more complex late-stage trials that focus on a drug's efficacy. There is some evidence that a drug is more likely to complete phase 3 if developed by firms whose experience is focused rather than broad (diseconomies of scope). There is evidence of positive knowledge spillovers across firms for phase 1. However, for phase 2 and phase 3 the estimated effects of industry-wide experience are negative, which may reflect either higher Food and Drug Administration (FDA) approval standards in crowded therapeutic categories or that firms in such categories must pursue more difficult targets. Products developed in an alliance tend to have a higher probability of success, at least for the more complex phase 2 and phase 3 trials, and particularly if the licensee is a large firm.

How to present the business case for healthcare quality to employers

Many employers in the US are investing in new programmes to improve the quality of medical care and simultaneously shifting more of the healthcare costs to their employees without understanding the implications on the amount and type of care their employees will receive. These seemingly contradictory actions reflect an inability by employers to accurately assess how their health benefit decisions affect their profits. This paper proposes a practical method that employers can use to determine how much they should invest in the health of their workers and to identify the best benefit designs to encourage appropriate healthcare delivery and use. This method could also be of value to employers in other countries who are considering implementing programmes to improve employee health. The method allows a programme that improves workers' health to generate four financial benefits for an employer - reduced medical costs, reduced absences, improved on-the-job productivity, and reduced turnover - and uses accurate estimates of the benefits of reducing absences and improving productivity.

Pollution monitoring in Southeast Asia using biomarkers in the mytilid mussel Perna viridis (Mytilidae: Bivalvia)

Mytilid mussels have been extensively used in marine pollution monitoring programmes in temperate regions of the world although widespread subtropical representatives such as Perna viridis have only comparatively recently been utilised to monitor the sublethal effects of pollution in Southeast Asia. P. viridis is considered a subtropical equivalent of the temperate Mytilus sp. and has considerable potential for pollution monitoring throughout its geographical range. This paper reviews the current status of biomarkers in P. viridis and provides some recommendations on biological-effects monitoring to facilitate the assessment of coastal pollution in Southeast Asia.