Pay for Performance: Doctors, are you ready?

A major topic at this week's Disorders of the Spine conference at Whistler, B.C., was pay for performance. It is no secret that surgical and treatment outcomes in medicine are all over the place, or that employers and payors including the federal government are starting to hone in on how to correct these variances. They are using a classical "carrot and stick" approach. Prove to us that you have the best outcomes, and we'll pay you more (or at least pay you something). Continue to hide behind the "art of medicine" argument and we'll pay you less or not at all.  

The major payors are already well positioned in this battle. They have lots of data. I wish the same was true for my beleaguered colleagues in the clinical trenches. Although many large group practices are now collecting their own data due to early adoption of robust electronic medical records systems, most docs will find themselves ill prepared to fight. And mind you, this will be a war. With vast resources, advanced analytics, and years of claims data, the insurance companies are poised to hammer outliers be they individual doctors, entire practices, or hospitals. How will you fight back? You must fight back with data of your own. At the conference there was a rallying cry for physician groups to band together, to share outcomes and best practices. Only then, it was said, will clinicians be able to level the playing field in this war over increasingly scarce healthcare dollars. And in order to have data, I guess it can be said there is yet another and very compelling reason to invest in an electronic medical record system for your practice. 

Speaking of scarce healthcare dollars, let me link to a related theme I saw on today's wire; that of our precarious hospital pricing system. Current pricing practices routinely allow for highly profitable departments and services to subsidize ones that otherwise wouldn't make it on their own. Researchers suggest that greater transparency in pricing, deregulation, and consumer directed healthcare plans may have an effect on hospitals similar to what we are experiencing in the airline business. Predictions are that many hospitals would have to cut unprofitable services or risk the fate of big airlines; going into bankruptcy. For more on that theme, check out the article by Stuart Altman, David Shactman, and Efrat Eilat at

Let us know what you think.

Bill Crounse, MD Healthcare Industry Director Microsoft Healthcare and Life Sciences