We lost our way with performance pay

Many clinicians and sector leaders saw the programme as irrelevant widget-counting

It was born at the same time as England’s famous – or infamous – Quality and Outcomes Framework.

The PHO Performance Programme, depending on whom you talk to, was a dud, either because it was like the English framework or because it wasn’t.

I’m not here to either praise or bury pay for performance, generally, or the Quality and Outcomes Framework, or the PHO Performance Programme.

For the record, I’m not a great fan, but nor do I think pay for performance is the devil incarnate.

I have been scouring its recent history, starting with Verna Smith’s excellent recent book Bargaining Power. They say history doesn’t repeat, but it rhymes. What is most striking about the New Zealand story is the pendulum swings between measuring clinical quality at one end, and population-level indicators at the other.

Since the 1990s, primary-care-sector representatives have made repeated attempts to design a bottom-up approach to incentivising improvement in primary care.

The first iteration was budget-holding by Independent Practitioner Associations in the 1990s.

These associations negotiated some contracts that incentivised savings on pharmaceuticals and laboratory referrals.

With a new government and policy direction in the form of the Primary Health Care Strategy, Ministry of Health officials wanted to build on this legacy. So they convened the Referred Services Advisory Group in 2002 to advise the ministry on appropriate incentives. They consulted widely.

The first version of the PHO Performance Programme in 2005 gave the largest weight (60 per cent) to clinical indicators, and only 10 per cent to population health indicators, such as screening rates. By 2007, however, the weightings had shifted to population health indicators, such as cancer screening and immunisation. It was around this time that the specific pot of performance-based funding became institutionalised. Initially, it amounted to up to $4 per patient, but more recently has been immortalised as “the $23 million”.

By 2009, many clinicians and sector leaders already saw the programme as irrelevant widget-counting.

With Tony Ryall the new health minister, primary care leaders were encouraged to develop an alternative. The General Practice Leaders Forum developed the Quality Improvement for General Practice (QI4GP) proposal that linked quality improvement to professional accreditation.

The PHO Performance Programme, in the meantime, was streamlined and aligned to Mr Ryall’s health targets, with greater emphasis on smoking cessation advice, immunisation, and cardiovascular disease and diabetes risk assessment.

The next iteration led by primary care leaders was the Integrated Quality Improvement Framework and its “straw man” in 2012. Again, this was heavily weighted to­wards clinical quality indicators and processes.

The sector capability and innovation directorate of the Ministry of Health engaged consultants trusted by primary care leaders to expand on this framework. Thus we saw the extensive Integrated Performance and Incentive Framework proposal of 2014.

Known as IPIF, this linked performance of primary care practices and PHOs to a tiered incentive structure that had “earned autonomy” at its apex.

But “Big IPIF” was never implemented.

Rather confusingly, “Little IPIF” emerged, and it was really a rebadging of the PHO Performance Programme that was supposed to have been swept away.

Finally, the System Level Measure Framework in 2016 removed most of the pay-for-performance component, but a smidgen remains tied to the old programme targets.

In practice, PHOs still use much of the system level money directed at capacity and capability improvement to incentivise population health improvements.

What we have here is not a simple story of governments unilaterally imposing a pay-for-performance scheme on an unwilling sector.

Instead, primary care-led designs for clinical quality improvement frameworks evolve into instruments for tracking population health indicators.

Why does this keep happening?

Well, perhaps it’s because the $23 million has been the only piece of government funding of primary care in which governments have some leverage over what primary care practitioners do.

For all the fine policy pronouncements about primary care as being ideally positioned to promote and enhance population health, this was the only tool left in the toolbox, with the possible exception of the Flexible Funding Pool.

Of course, general practices regarded the PHO Perfor­mance Programme and IPIF more as an irritant than an existential threat. As leverage, it was never significant.

There is a common view among sector leaders – within government and representing primary care – that quality improvement and population health go hand in hand and are mutually supportive.

Disciples of the Boston-based Institute for Health Improvement and its Triple Aim approach recognise that these things are equally important (alongside efficiency as the third aim). However, as with any balanced scorecard approach, the different dimensions of effectiveness, improvement, performance, whatever we want to call it, can also tug strongly against each other.

So how is that pull experienced in the consulting room of the primary care practitioner?

Do they treat someone in front of them who needs help now, or do they do things that might prevent others from needing help in the future? Both are vital. Only one can be done at a time. A lifetime of training and experience predisposes most clinicians to choose the former. Pay for performance has not changed their decisions.

The tension between fostering clinical quality improvement and focusing on population health should be more openly acknowledged.

And, if neither has been effectively advanced through pay for performance after 15 years, it’s probably time for advocates of each policy goal to look elsewhere.

Tim Tenbensel is associate professor, health policy, in the School of Population Health at the University of Auckland