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USING PERFORMANCE AND OUTCOME MEASURES

Mady Chalk, Ph.D.Treatment Research Institute

Summit on Performance and Outcome MeasurementMarch, 2008

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CONTEXT

• Performance-based contracting is part of a continuum of purchaser-provider payment relationships:– Informal agreements re: services, target

populations– Grants (basic operating grants, training grants)

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CONTEXT (con’t)

• As we said at the last summit, performance contracts:– Specify results, service delivery targets, population

served– Include indicators by which results are measured– Spread financial risk between the purchaser and

the provider

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CONTEXT (con’t)

• Performance contracting is a health reform strategy that uses 3 levers:

– Provider payment– Organizational change– Regulation

• Aims to improve efficiency, quality, access, sustainability

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Power of Performance Measurement

• There is a link between effective performance measurement and successful service results.

• Performance measurement is NOT simply a safeguard; it is an incentive mechanism and a delivery tool.

• There is no “one fits all” approach to using performance measures for different services.

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WHAT DO YOU NEED TO KNOW?

1. What do you want to improve: access, for specific groups or services?

2. What are your targets: clinical treatment programs, specific population, continuum of care, recovery support services

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WHAT DO YOU NEED TO KNOW?

3. What will be your measures: depends on objectives; can be process of care; can be health status outcomes

4. What will be your monitoring, evaluation and enforcement plan: frequency, criteria, rewards and penalties

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WHAT DO YOU NEED TO KNOW?

5. What will be your pricing method: fixed prospectively, retrospective adjustment

6. What will be your payment mechanism: budget, unit cost, capitation, by case, by activity

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DEVELOPING MEASURES

• Performance measures need to be developed with clear reference to practical service considerations AND in consultation with operational experts, i.e. providers

• Operational staff need to be routinely consulted about the design of a performance measurement, monitoring, and (ultimately) contracting program.

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WHEN MEASUREMENT WORKS

• Understanding the service needs and model, clinical and business processes, what is required to get from A to B

• More measures and increased complexity do not necessarily lead to better service results

• Financial reward is not the only incentive• Good partnership based on shared objectives• The right bid criteria

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IMPLEMENTATION

• Management

• Monitoring, evaluation, and “tweaking”

• Enforcement: who does it, when and how

• Who loses, who gains, too much, too little

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CONDITIONS AFFECTING SUCCESS

• Where capacity is weak, might– Start with non-clinical services to gain experience– Start with outpatient services before detox– Start with a geographic area where more providers

exist

• Where capacity is strong,– Pay attention to more modest increase in skills

needed to implement changes at the provider level

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CONDITIONS AFFECTING SUCCESS

• Developing and transferring best practice performance measurement and contract designs: case studies, evaluations

• Developing procurement and contract management skills at all levels

• Involvement of operational experts (providers) early in the process

• Flexibility: allow room for innovation