Staying on top of the “pay for performance” trend keeps sleep centers focused on patients while increasing referrals.

 Paying hospitals and physicians for their performance is a hot trend for managed care organizations. A new report identified approximately 100 active pay for performance programs, and the number is growing to include incentive trials from Medicare and Medicaid. Most of these programs are relatively new and are learning as they go. This offers a sleep center that is prepared and willing to participate in a pay for performance program with the opportunity to design a new level of relationships in developing more patient referrals.

Why Act?
There are several reasons to participate in a pay for performance program. When a data resource capacity is developed, a sleep center can differentiate itself from all others. If services are expanded to focus on the managed care organization’s interest, then not only will it use a sleep center for its patients, but it also will use the center’s data as a part of its reports for performance payment. In this case, data becomes the driving force of new relationships.

Currently, only the hospitals and physicians with managed care share data, but that formula can be changed. When it is made clear what can be done for the patient and the results of the data are proven, then payment becomes possible. The sleep center’s image as a player in the market will be raised, and more people will become aware of what it can bring to a relationship. Finally, this heightened level of awareness from that center’s targeted audience can bring other interested parties to its door both now and in the future.

Why Didn’t This Work In The Mid 1990s?
The central reason earlier programs did not work is because IT hardware and software could not merge physician, hospital, and managed care data into the clinical and financial formats for a true performance-based metrics. Since then, this capacity has significantly changed in part due to the advances made in other industries that manage large volumes of data and bring it forward as business intelligence. This new hardware and software capability is being introduced to health care. A drive for paperless systems will also stimulate the growth in data merging and expand which users see what data. Remember that consumers are now a part of the demand for performance data.

What To Do First
There is little likelihood that managed care is going to seek out sleep center outcome performance programs. The pay for performance program focuses on high-end cost such as hospitals and physician services; however, this does not exclude the sleep center from taking advantage of this new trend. Consider the comorbidity of diabetes, asthma, chronic obstructive pulmonary disease, and obesity as well as cardiac and hypertension diseases. They all come together inside many OSA patients.

New York City is considering a plan to monitor people with diabetes. The plan would require medical laboratories to report test results showing how well individual patients are controlling their disease with the intent of pinpointing problem patients to improve their care and save treatment costs estimated at $5 billion a year. At least a half million New Yorkers have diabetes and are at risk for blindness, kidney failure, amputations, and heart problems because they are doing a poor job of controlling the illness. Yes, there are diabetes centers, but these patients are already in our system for a different reason.

We have patient data that can broaden into a disease center focal point for hybrid models that will interest many pay for performance programs. But because of the special nature of our work, the design of these services will have to come from our side of the table; we will have to stimulate an interest by modeling it to fit their level of interest.

Could it be that sleep centers can have a role as patient education centers and in the monitoring of patients using proven behavioral modification programs? Do not close off the idea too soon. A sleep center can have a real part of these dollars when it can add the right level of data to the formula being used in the pay for performance program trend.

What would a model look like?
Before a model is developed, one must look at the trend. Typically, trends start with a concept around products or services that are currently being used; only now, they will be applied in a different way. Then over time, new products or services are combined to create a more efficient manner of work toward an end goal. So, we want to start with what is available and then add to it. Trends are looked at as an assembly line where over time, parts are added to the process.

So, the entire model is designed, then developed in parts as it relates to the phase that the pay for performance program is in; this way, the mistake of adding too much, too soon, or adding the wrong parts is avoided. This is contrary to the past where the model was built and then a payor was looked for.

Also, whatever ends up being built, it needs to fit into a strategic plan. We need to understand that some pay for performance programs may be inappropriate for our business model. We need to evaluate them based on their design and be prepared to walk away from a deal that does not match our review criteria. Going into this with our eyes open and a willingness to participate as a whole, in parts, or possibly not at all is a strategic strength.

By staying engaged with the people who are involved in a pay for performance trend, it is easier to keep a better handle on where we are in the process of the trend and stay aware of the margins. Solicit input from the layers of patient health care givers. Seek to understand by listening to the opinions of those who are involved in this process. Build a model in phases around their needs and consider areas that we have not gone into during previous relationships. We need to keep in mind that this data is not just clinical and not just financial. It is a strategic tool that spans in many directions.

Get credibility for the data
It is best to have a partnership with a data warehouse group. Use your own and the group’s data to be sure that your metrics are quantifiable, evidence-based, and clinically valid. Also, consider the lessons learned by disease state management companies that have spent the last 8 years collecting specific data sets for performance payments. They too are a great resource.

Apply clinical and financial regional comparisons to your data. There will be a competitive advantage to those organizations that can take volumes of data and report a score in the context of regions and local practices with similar relative risk or other relevant groupings to be compared against other similar groups. There will also be a benefit when we can factually assist physicians to see how their practice patterns compare to the others, to standard benchmarks, or to a baseline where a clinical change was instituted.

Seek alliances with manufacturers, associations, hospitals, and other organizations that impact patient care. Many manufacturers offer data feedback capacities that will streamline the collection process. Consider the higher end CPAP equipment, heart monitors, diabetes testing downloads, and telemedicine. Look at stronger relationships with home health care agencies and durable medical equipment companies, and get their local associations to start a data warehouse sharing co-op. Get them together with your manufacturer representatives and challenge everyone to become partners in this model.

In conclusion, the dollars to share are loosening up when we can prove what we do makes a difference. But are we ready to respond? Those who can think both horizontally and vertically will win more. We do not want to be like the mouse who stayed the same and starved. Go out and ask questions, make sure your cheese has not moved, and, if it has, then go find it.

Roy P. Poillon is president of White Oak Marketing, a healthcare marketing and sales consulting group in Medina, Ohio; (330) 962-8183;