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Health Biz: Physicians join the P4P game

By ELLEN BECK   |   March 10, 2005 at 4:44 PM   |   Comments

WASHINGTON, March 10 (UPI) -- Pay for performance is the big thing for 2005 in healthcare and physicians want a part in developing the structure of this new type of payment contract.

Doctors are willing to explore P4P, but many harbor serious concerns it may be more about cutting their payments from insurers and, potentially, their reimbursement from Medicare to save money, than it is about increasing the quality of healthcare and rewarding better outcomes.

"Their sense is that they are excited about the prospect of trying to align the financial reimbursement system around quality outcomes," Dr. James Pope, chief medical officer at American Healthways, told UPI's Health Biz. "There are concerns that pay-for-performance plans are wolves in sheep's clothing."

American Healthways, headquartered in Nashville, last fall partnered with Johns Hopkins to bring more than 200 physicians together for a P4P summit. The result was a list of design principals that physicians think should be used in developing these contracts. The priorities include basing P4P programs on positive financial incentives; using a combination of outcomes, process and structural measures; involving patients in the development process, and establishing a common set of criteria for employers, public purchasers, payers and providers in a specific medical market.

The American Medical Association, too, has come out with guidelines on how P4P programs should be structured, echoing similar priorities. The AMA wants contracts that are voluntary for physicians, use accurate data and a fair system of reporting, provide fair incentives, emphasize the patient/physician relationship, and ensure quality of care.

"We are very specific. Pay for performance programs must be designed and implemented based on the evidence," AMA Secretary Dr. John Armstrong told Health Biz. "The same must apply with reporting of this data. We state right from the start our concerns about patient privacy ... and move on to discuss the scientific validity of data collection and using data appropriate to the question being asked."

Medicare also is eyeing P4P as a way to align payments with outcomes. A big criticism of the program is it sets payment levels based on diagnosis -- and every physician, good or bad, gets that payment. This does little to encourage seniors to shop around for the best healthcare providers and even less to incentivize physicians to provide the best care they can.

The Centers for Medicare and Medicaid Services recently said it was partnering with physician groups in a P4P demonstration project to test drive such contracts in real time. Lawmakers, however, while giving nods to the quality of care aspect, really are still looking at P4P as a way to rein in physician costs in the almost $300 billion annual senior entitlement.

So, physicians have good reasons to be wary. No one has forgotten managed care of the mid-1990s, which began with the best of intentions of putting decisions in the hands of physicians to control costs.

"What ended up was a terrible mess in most instances, Pope said, "where care seemed to be rationed and access seemed to be reduced."

Although doctors are proactively reserving their seats at the negotiating table, they also are urging healthcare to go slow on P4P.

"It is in the planning that one sets the conditions of success," Armstrong said. "We intend to remain vigilant on behalf of our members and patients to make sure pay for performance truly adheres to the guidelines."

He said cost savings from pay-for-performance programs may not be evident early on and may show up elsewhere in the bigger healthcare-system picture -- benefits reaped by improvements in systems and quality care.


INVESTORS EYE STEM-CELL RESEARCH IN NEW LIGHT

Recent publicity about encouraging stem-cell research -- along with the passage of Proposition 71 in California that will drive new dollars into development of therapies -- have piqued the interest of venture capitalists and may signal better funding times to come for private research companies.

In the past few weeks, at least seven new reports have come out on advances in stem-cell technology. Proposition 71 creates the California Institute for Regenerative Medicine to regulate and fund stem-cell research -- but not human reproductive cloning. The state will be able to issue bonds up to $350 million per year to a $3 billion limit for stem-cell-research activity.

"I think that (Proposition 71) really allows investors to put money in knowing there's going to be additional money," said Robert Lanza, of Advanced Cell Technology in Worcester, Mass., who noted before November's vote his company's money stream had evaporated and the phones were shut off.

Lanza, also a professor at Wake Forest University, told a daylong meeting on the stem-cell industry -- convened by the American Enterprise Institute -- he now is hiring to double his staff. He added, though, President Bush's ban on using federal dollars for embryonic research and his decision to limit the stem-cell lines available to those already in existence have hurt.

"People think, 'Leave this to the private sector,'" Lanza said. "Hello! The private sector has very limited funds as well. We need to have funding to move this research forward and now, with Proposition 71, I think you are going to see this move forward very rapidly."

Research on embryonic stem cells has stalled in the United States because of the funding ban and because of new reports the existing cell lines are contaminated.

"Before we can get into the clinic, it's very important that we have lines that are safe for applications -- and this is where we are starting to run into problems," Lanza said.

He said researchers can work around the need to use animal products to create and preserve the stem cells -- the contamination problem with existing lines -- and the entire stem-cell creation process probably can be reduced to a few simple extracellular molecules -- but only if there is money available to forward the research.

Lanza said the goal is to be able to take a patient's own cells, use therapeutic cloning to create cells needed to treat disease or injury, and then inject those cells back into the same patient.

Ken Gaicin of StemCyte, in Arcadia, Calif., one of the largest cord-blood stem-cell banks in the United States, said the company's format has been a little different -- establishing a viable base business in the stem-cell bank and then branching out into research -- but recent news of cord-blood benefits and Proposition 71 "seem to have turned (funding interest) on a little bit more."

StemCyte, which has about 20,000 units of cord-blood stem-cells in storage, is working with research groups to develop cord-blood stem-cell therapies and now provides two to three units of cord-blood stem-cells for transplant each week to hospitals around the world. Mainly, this help goes to children and adults who cannot find bone-marrow matches.

"There is a huge unmet need and it's increasing every day," he said, because up to 75 percent of people cannot find a bone-marrow match.

From a business standpoint, he said StemCyte pursues all types of funding opportunities, but "we just can't count on it, we have to feed ourselves." That means continuing to develop the stem-cell bank and then working with researchers on cord-blood projects.

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E-mail: ebeck@upi.com

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