Promote the use of health information technology to improve the quality of care for chronically ill Medicare patients.

Promote the use of health information technology to improve the quality of care for chronically ill Medicare patients.

Promote the use of health information technology to improve the quality of care for chronically ill Medicare patients.

C H A P T E R 1 2

STRATEGIC PLANNING AND PAY FOR PERFORMANCE

KEY TERMS AND CONCEPTS

➤ Intensivists

➤ Leapfrog Group

➤ Pay-for-performance (P4P) programs

Knowing is not enough; we must apply. Wil l ing is not enough; we must do.

—Johann Wolfgang von Goethe

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1 6 0 E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e

INTRODUCTION According to The Commonwealth Fund (see Highlight 12.1), waste and medical errors add $100 billion to U.S. healthcare expenses and may cost 150,000 lives annually. To encourage quality improvement and more efficient delivery of healthcare services, the government, insur- ance companies, and other groups implement pay-for-performance (P4P) programs, which offer financial incentives to physicians, hospitals, and other healthcare providers in exchange for meeting certain performance targets. P4P initiatives can also reduce the payments providers receive if they commit medical errors, have poor quality outcomes, or incur excessive costs.

An awareness of P4P offerings is important in strategic planning. To maximize an organization’s income and improve quality and efficiency in the delivery of care, strategic planners incorporate objectives into the strategic plan that are geared toward achieving P4P performance targets.

MEDICARE PAY-FOR-PERFORMANCE INITIATIVES As part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Con- gress directed the Institute of Medicine to identify ways to better align healthcare performance

Pay-for-performance

(P4P) programs

initiatives implemented

by the government,

insurance companies,

and other groups to

reward providers for

meeting certain perfor-

mance targets in the

delivery of healthcare

services

HIGHLIGHT 12.1 The Commonwealth Fund

The Commonwealth Fund is a private institution whose goal is to improve access to care,

quality of care, and efficiency of care in the United States. The Commonwealth Fund is

especially interested in helping vulnerable people receive better care: the low-income

population, the uninsured, minorities, young children, and the elderly.

To achieve these goals, The Commonwealth Fund supports independent research on

how care could be improved. For example, The Commonwealth Fund has published re-

ports on such topics as asthma outcomes in minority children and reasons for patient

readmission to hospitals after discharge. It also publishes reports to inform the public,

such as its analysis of the different healthcare reform bills proposed by the U.S. House

of Representatives and Senate in late 2009. Many of its publications provide information

and statistics about the current state of healthcare in the United States.

Financed by individuals and organizations that support its mission, The Common-

wealth Fund grants money to tax-exempt organizations and public agencies to improve

the provision of healthcare and to study and recommend policy changes that will improve

the healthcare system. For example, some of its grants support programs that study the

future of Medicare and the care of frail elderly adults.

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