Pay for Performance and Value-Based Care

  • Brett TracyEmail author


In the past century, the face of medical compensation has changed on multiple occasions. The care delivery model (aka fee-for-service model) has functioned for decades, by rewarding providers for the volume and complexity of services they rendered. Unfortunately, this method has been criticized for leading to excessive workups and testing for financial gain. Therefore, in order to more effectively control physician reimbursement, the Congress created the Physician Payment Review Commission in 1986. By 1992, the resource-based relative value system (RBRVS) was begun by Medicare and maintained the physician payment expenditures in a budget-neutral fashion by creating a financial conversion factor. RBRVS accounted for physician work, practice expense, professional liability, and geographic factors [1]. Although this system was equitable in rewarding physicians for the amount of care provided, it was inadequate to address quality of care, a concept that was developing at the same time.


Surgical Care Improvement Project Sustainable Growth Rate Physician Quality Reporting System National Surgical Quality Improvement Project Alternative Payment Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. 1.
    Jones RS, Brown C, Opelka F. Surgeon compensation: “Pay for performance” the American College of Surgeons National Surgical Quality Improvement Program, the Surgical Care Improvement Program, and other considerations. Surgery. 2005;138:829–36.PubMedCrossRefGoogle Scholar
  2. 2.
    Donabedian A. The end results of health care: Ernest Codman’s contribution to quality assessment and beyond. Milbank Q. 1989;67(2):233–56.PubMedCrossRefGoogle Scholar
  3. 3.
    Chun J, Bafford AC. History and background of quality measurement. Clin Colon Rectal Surg. 2014;27:5–9.PubMedPubMedCentralCrossRefGoogle Scholar
  4. 4.
    Pratt GM, McLees B, Pories WJ. The ASBS Bariatric Surgery Centers of Excellence program: a blueprint for quality improvement. Surg Obes Relat Dis. 2006;2:497–503.PubMedCrossRefGoogle Scholar
  5. 5.
    Shackford SR. The future of trauma surgery- a perspective. J Traum- Inj Inf CC. 2005;58(4):663–7.CrossRefGoogle Scholar
  6. 6.
    Weston A, Caldera K, Doron S. Surgical care improvement project in the value-based purchasing era: more harm than good? Clin Infect Dis. 2013;56(3):424–7.PubMedCrossRefGoogle Scholar
  7. 7.
    Stulberg JJ, Delaney CP, Neuhauser DV, Aron DC, et al. Adherence to surgical care improvement project measures and the association with postoperative infections. JAMA. 2010;303(24):2479–85.PubMedCrossRefGoogle Scholar
  8. 8.
    Bratzler DW. Surgical care improvement project performance measures: good but not perfect. Clin Infect Dis. 2013;56(3):428–429.Google Scholar
  9. 9.
    Khuri SF, Daley J, Henderson W, et al. The Department of Veterans Affairs’ NSQIP: the first national, validated, outcome-based, risk-adjusted, and peer-controlled program for the measurement and enhancement of the quality of surgical care. Ann Surg. 1998;228(4):491–507.PubMedPubMedCentralCrossRefGoogle Scholar
  10. 10.
    Guillamondegui OD, Gunter OL, Hines L, et al. Using the National Surgical QUaltiy Improvement Program and the Tennessee Surgical Quality Collaborative to improve surgical outcomes. J Am Coll Surg. 2012;214(4):709–14.PubMedCrossRefGoogle Scholar
  11. 11.
    Hall BL, Hamilton BH, Richards K, Bilimoria KY, Cohen ME, Ko CY. Does surgical quality improve in the American College of Surgeons National Surgical Quality Improvement Program: an evaluation of all participating hospitals. Ann Surg. 2009;250(3):363–76.PubMedGoogle Scholar
  12. 12.
    Glickman SW, Peterson ED. Innovative health reform models: pay-for-performance initiatives. Am J Manag Care. 2009;15:S300–5.PubMedGoogle Scholar
  13. 13.
    Ryan A, Sutton M, Doran T. Does winning a pay-for-performance bonus improve subsequent quality performance? evidence from the hospital quality incentive demonstration. Health Serv Res. 2014;49(2):568–71.PubMedCrossRefGoogle Scholar
  14. 14.
    Sidawy AN. Pay for performance: the process and its evolution. J Vasc Surg. 2006;44:892–902.PubMedCrossRefGoogle Scholar
  15. 15.
    Linskey ME. Neurosurgery quality: pay-for-performance, guidelines, and outcome measures. Clin Neurosurg. 2007;54:157–79.PubMedGoogle Scholar
  16. 16.
    James J. Health policy brief: pay-for-performance. Health Aff. 2012;1–6.Google Scholar
  17. 17.
    Rosenthal MB. Nonpayment for performance? Medicare’s new reimbursement rule. N Engl J Med. 2007;357(16):1573–5.PubMedCrossRefGoogle Scholar
  18. 18.
    Fenter TC, Lewis SJ. Pay-for-performance initiatives. J Manag Care Pharm. 2008;14(6):S12–5.Google Scholar
  19. 19.
    Rosenthal MB, Landon BE, Normand SL, et al. Pay for performance in commercial HMOs. N Engl J Med. 2006;355(18):1895–902.PubMedCrossRefGoogle Scholar
  20. 20.
    Steel N, Willems S. Research learning from the UK quality and outcomes framework: a review of existing research. Qual Prim Care. 2010;18(2):117–25.PubMedGoogle Scholar
  21. 21.
    Eijkenaar F, Emmert M, Scheppach M, Schoffski O. Effects of pay for performance in health care: a systematic review of systematic reviews. Health Policy. 2013;110:115–30.PubMedCrossRefGoogle Scholar
  22. 22.
    Shih T, Nicholas LH, Thumma JR, Birkmeyer JD, et al. Does pay-for-performance improve surgical outcomes? an evaluation of phase 2 of the premier hospital quality incentive demonstration. Ann Surg. 2014;259(4):677–81.PubMedPubMedCentralCrossRefGoogle Scholar
  23. 23.
    Premier. Centers for Medicare & Medicaid Services (CMS). Premier hospital quality incentive demonstration project. 2006.
  24. 24.
    Serak J, Wang MY. The performance of pay-for-performance policies. World Neurosurg. 2015;83(4):401–2.PubMedCrossRefGoogle Scholar
  25. 25.
    Jha AK, Joynt KE, Orav EJ, Epstein AM. The long-term effect of premier pay for performance on patient outcomes. N Engl J Med. 2012;366:1606–15.PubMedCrossRefGoogle Scholar
  26. 26.
    Bhattacharyya T, Freiberg AA, Mehta P, et al. Measuring the report card: the validity of pay-for-performance metrics in orthopedic surgery. Health Aff (Millwood). 2009;28(2):526–32.CrossRefGoogle Scholar
  27. 27.
    Werner RM, Kolstad JT, Stuart EA, Polsky D. The effect of pay-for-performance in hospitals: lessons for quality improvement. Health Aff. 2011;30(4):690–8.CrossRefGoogle Scholar
  28. 28.
    Lindenauer PK, Remus D, Roman S, Rothberg MB, et al. Public reporting and pay for performance in hospital quality improvement. N Engl J Med. 2007;356:486–96.PubMedCrossRefGoogle Scholar
  29. 29.
    Ryan AM, Burgess JF, Pesko MF, Borden WB, Dimick JB. The early effects of Medicare’s mandatory hospital pay-for-performance program. Health Serv Res. 2015;50(1):81–95.PubMedCrossRefGoogle Scholar
  30. 30.
    Mathauer I, Wittenbecher F. Hospital payment systems based on diagnosis-related groups: experiences in low- and middle-income countries. Bull World Health Orgn. 2013;91:746–56.CrossRefGoogle Scholar
  31. 31.
    Ryan AM, Damberg CL. What can the past of pay-for-performance tell us about the future of Value-Based Purchasing in Medicare? Healthcare. 2013;1:42–9.PubMedCrossRefGoogle Scholar
  32. 32.
    Anumula N, Sanelli PC. Physician quality reporting system. AJNR Am J Neuroradiol. 2011;32:2000–1.PubMedCrossRefGoogle Scholar
  33. 33.
    Chien AT, Rosenthal MB. Medicare’s physician value based payment modifier- will the tectonic shift create waves? N Engl J Med. 2013;369(22):2076–8.PubMedCrossRefGoogle Scholar
  34. 34.
    United States Government Accountability Office. Hospital value based purchasing: initial results show modest effects on medicare payments and no apparent change in quality-of-care trends. GAO-16-9. Washington D.C. 2015.Google Scholar
  35. 35.
    Gaskin DJ, Zare H, Haider AH, LaVeist TA. The quality of surgical and pneumonia care in minority-serving and racially integrated hospitals. Health Serv Res. 2015;1–24.Google Scholar
  36. 36.
    Karve AM, Ou FS, Peterson ED. Potential unintended financial consequences of pay-for-performance on the quality of care for minority patients. Am Heart J. 2008;155(3):571–6.PubMedCrossRefGoogle Scholar
  37. 37.
    Snyder L, Neubauer RL. Pay-for-performance principles that promote patient-centered care: an ethics manifesto. Ann Intern Med. 2007;147(11):792–4.PubMedCrossRefGoogle Scholar
  38. 38.
    Mullen KJ, Frank RG, Rosenthal MB. Can you get what you pay for? Pay-for-performance and the quality of healthcare providers. Rand J Econ. 2010;41(1):64–91.PubMedCrossRefGoogle Scholar
  39. 39.
    Speir AM, Yohe C, Rich JB, Mayer JE, et al. SGR repeal: reprieve or pyrrhic victory? Ann Thorac Surg. 2015;100:1143–7.PubMedCrossRefGoogle Scholar
  40. 40.
    Aaron HJ. Three cheers for logrolling- the demise of the SGR. N Engl J Med. 2015;372(21):1977–9.PubMedCrossRefGoogle Scholar
  41. 41.
    Stead SW. MACRA strategy: quality reporting and contribution to savings. Anesthesiology. 2015;79(7):1–9.Google Scholar
  42. 42.
    Doherty RB. Goodbye, sustainable growth rate- hello, merit-based incentive payment system. Ann Intern Med. 2015;163(2):138–9.PubMedCrossRefGoogle Scholar
  43. 43.
    Rosenthal MB. Physician payment after the SGR- the new meritocracy. N Engl J Med. 2015;373(13):1187–9.PubMedCrossRefGoogle Scholar
  44. 44.
    Manchikanti L, Staats PS, Boswell MV, Hirsch JA. Analysis of the carrot and stick policy of repeal of the sustainable growth rate formula: the good, the bad, and the ugly. Pain Physician. 2015;18:E273–92.PubMedGoogle Scholar
  45. 45.
    American Medical Association. Medicare access and CHIP reauthorization act o 2015 (MACRA); 2015;1–4.Google Scholar
  46. 46.
    Siljander B, Gross JL. Assessing the impact of the medicare access and CHIP reauthorization act: the repeal of the SGR and beyond. Health Lawyer. 2015;26(6):26–69.Google Scholar
  47. 47.
    Siljander B, Gross JL. Assessing the impact of the medicare access and CHIP reauthorization act: the repeal of the SGR and beyond. Health Lawyer. 2015;27(6):26–34.Google Scholar
  48. 48.
    Spitalnic P. Estimated effects of the Medicare access and CHIP reauthorization act of 2015 (H.R.2). Baltimore: Centers for Medicare and Medicaid Services, Office of the Actuary; 2015.Google Scholar
  49. 49.
    McClellan M, Berenson R, Chernew M, et al. Medicare physician payment reform: securing the connection between value and payment. Washington, DC: The Brookings Institution, January 27, 2015.
  50. 50.
    Rudnicki M, Armstrong JH, Clark C, Marcus SG, et al. Expected and unexpected consequences of the affordable care act: the impact on patients and surgeons- pro and con arguments. J Gastrointest Surg. 2016;20:351–60.PubMedCrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2017

Authors and Affiliations

  1. 1.Department of SurgeryMercer University School of Medicine, Memorial University Medical CenterSavannahUSA

Personalised recommendations