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Performance Management in Accountable Care Organizations: Insights from a one-year Harkness Fellowship in the US

Dr Alexander PimperlDr Alexander PimperlDr Alexander Pimperl returned to OptiMedis on October, 1. Last year, he was awarded with the Commonwealth Fund’s Harkness Fellowship in Health Care Policy and Practice, one of the most prestigious and coveted healthcare scholarships worldwide. For twelve months he had been working at the University of California, Berkeley with Prof. Hector Rodriguez, Prof. Steven Shortell (UC Berkeley) and Dr Julie Schmittdiel (Kaiser Permanente) on the topic “Performance Management in Accountable Care Organizations in the U.S. and Germany: From external reporting requirements to enabling internal performance management in physician practices?”.

Performance management systems (PMSYSs) are an important tool for increasing the performance (quality, efficiency, effectiveness) of accountable care organizations (ACOs), and enable continuous improvement in affiliated physician practices. PMSYS refers to a set of metrics used to quantify and improve both the efficiency and the effectiveness of organizations. PMSYS include the performance measures themselves and all processes connected to the use of those measures, such as feedback reports, peer reviews, and decision support systems. So far, there is limited knowledge about the extent of implementation of PMSYSs in the U.S. and about general factors associated with their development and maintenance. In addition, although performance measurement is seen as a core element of ACOs and is externally enforced, sparse information exists as to the interplay of external reporting requirements and incentives for internal PMSYSs.

The research of Dr Pimperl et al. shows that, in general, PMSYS of US physician practices are underdeveloped. On average, practices achieved less than one third of the points of the PMSYS composite index used in the study based on a nationally representative survey of U.S. medical practices. Even practices in ACOs use just about half of the measured PMSYS processes, despite the necessity of performance measurement and management in these organizations for achieving shared savings and quality goals. Furthermore, also the four best-practice ACO cases studied struggled with some essential PMSYS features, such as ensuring timely feedback to all relevant stakeholders. These findings highlight that there is considerable room for improvement.

Both external incentives and organizational capabilities may support PMSYS development. First, participating in an ACO itself was one of the strongest differentiators of physician organizations with robust PMSYSs versus those with underdeveloped PMSYSs in the analysis of the nationally representative survey of U.S. medical practices. In addition, participation in other forms of networks, such as Independent Physician Associations (IPA) or Physician Hospital Organizations (PHO), greater non-financial external incentives (evaluation by health plans or other entities, public reporting requirements, receipt of performance data by health plans) and greater health information technology (HIT) capabilities and chronic disease registries could also help to facilitate the initial development of performance management structures and processes. The study found no relationship between pay for performance (P4P) incentives and PMSYS implementation in general. P4P was only positively associated with greater PMSYS-IT-integration and not other dimensions of PMSYS in US physician practices. Dr Pimperl concludes that P4P may foster the technical adoption of practices relevant to meeting external requirements for reimbursement, but not the cultural changes necessary to also make performance measurement and continuous improvement to an integral part of the organizational culture. These findings were also strengthened by the ACO case studies.

Dr Pimperl recommends that, for internal PMSYS to be prioritized by physician practices and their affiliated ACOs, complex external requirements should be simplified by synchronizing measures and other requirements between payers and other entities or identifying and eliminating unnecessary, invalid demands, to free resources for internal performance measurement and management. In addition, ACOs and other networks are currently incentivized to exclude underdeveloped practices, as their value-based payment models in general emphasize enrolled or physician-attributed populations. Further proliferation of geographically oriented models, such as accountable care communities or the German ACO Gesundes Kinzigtal, could provide an opportunity to encourage these networks, with the right financial incentives, to also include underperforming practices in their region and leverage their existing system infrastructure to improve the PMSYSs of such practices. On top of that, policy initiatives to support the implementation and use of HIT, electronic chronic disease registries, and PMSYSs, such as the CMS Clinical Practice Transformation Initiative, are warranted for practices that do not have the resources to develop these capabilities through networks or other means.

Dr Pimperl highlights that for Germany, where in comparison to the US external financial and non-financial performance measurement requirements are in an early stage, finding that a high burden of external measurement requirements and P4P may have adverse effects on internal PMSYS, alongside the importance of strengthening internal organizational capabilities, has important policy implications. Overburdening of providers with external requirements has to be avoided. The right balance between the extent of external requirements and the internal capacities to respond to them has to be established. Policy initiatives could strengthen internal capacities by promoting geographically oriented ACOs and HIT capabilities.