Pay-for-performance (P4P) has been gaining momentum in the health care community
since 2001 when the Institute of Medicine report Crossing the Quality Chasm: A New
Health System for the 21st Century recommended incentive payments to improve health
care quality. Broad scale initiatives (see Figure 5) as well as individual health plan initiatives
to reward physicians for high quality care and improved patient outcomes have
become increasingly common. Hospital P4P programs are emerging as well. The next
evolution is likely to occur in pharmacy where an initiative to measure, monitor, and
improve quality at the individual pharmacy level is under way. (See sidebar article
Quality Wave Engulfs Pharmacy.)
Extending the Concept Across an Organization
WellPoint, Inc. has broken new ground in the pay-for-performance area by linking
incentive pay for every employee to success in improving member health. While
it’s increasingly common to compensate physicians for improving quality care
and patient health, WellPoint is the first health management company to tie all
employee compensation to such measures. The initiative extends to 40,000
associates in WellPoint’s family of companies, which includes pharmacy benefit
manager WellPoint NextRx.
In 2007, WellPoint launched a comprehensive initiative to measure improvement
in the health of its 35 million members using its newly developed Member Health
Index (MHI). The MHI includes 40 quality of care measures in 20 clinical areas.
Measures focus on prevention and screening, care management, clinical outcomes,
and patient safety. Some are based on national standards and others
were developed by WellPoint’s clinical experts. Four pharmacy measures included
in the MHI monitor use of appropriate medications for asthma, hypertension, pediatric upper respiratory infection, and persistent therapies.
WellPoint combines the measures in a proprietary statistical model to determine
the quality of health care its members receive year to year. As part of the initiative,
a portion of all WellPoint employees’ incentive income is tied to MHI score
In the first year of the initiative, WellPoint improved 17 of the 20 clinical areas
tracked, closing the gap between current and target performance by more than
the five percent annual goal. As a result, WellPoint employees received their
maximum incentive payout for meeting the goal for improvement in the MHI score.
For each of the measures that make up the MHI, WellPoint has experts that analyze
the results and determine strategies to improve processes such as screening
studies and outcomes of care. WellPoint has set its sights on an ambitious target
performance goal for the coming year.