The biggest P4P scheme in the world is going on in the UK, one that I first wrote about in early 2004. (For more on the  wider ramifications of reform in the UK ,see yet another article in this weeks NEJM) 

Note that all the GPs there have computers, so they can easily report their process behaviors. Note also that the introduction of the system as done as a way of giving extra cash to GPs, but extra cash for improving quality of primary care process. So the first year’s results are in, and the GPs have done much better than was predicted and better than most American groups studied other than the VA. I think this is so important in the light of where Medcare is going that I’m including the entire discussion section from the NEJM article from the Univ of Manchester group that studied it. It’s called “Pay-for-Performance Programs in Family Practices in the United Kingdom”, and its below the jump, as an exceprt from an article by Arnold Epstein commenting on its implications for the US

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In the first year of the pay-for-performance program, English family
practitioners performed extremely well with respect to the quality
targets, attaining a median of 96.7 percent of the available points for
clinical indicators. This greatly exceeded the 75 percent predicted
when the scheme was negotiated, and consequently the cost to the
taxpayers was considerably more than expected. Before the new contract
was implemented, family practitioners typically earned from £70,000 to
£75,000 ($122,000 to $131,000). The pay-for-performance program
increased the gross income of the average family practitioner by
£23,000 ($40,200), although the practitioners bore any additional
nursing and administrative costs of meeting the targets. In 2005–2006,
family-practitioner income will rise even more, since quality payments
have been increased to £125 ($218) per point.Exact comparisons
with U.S. data on quality of care are difficult because of differences
in indicators, dates of data collection, and samples. However, some
limited comparisons are possible. For example, 91 percent of patients
with diabetes had their glycated hemoglobin levels measured in
2004–2005 under the new pay-for-performance program in England. In
comparison, glycated hemoglobin levels were measured in 94 percent of
patients with diabetes treated by the U.S. Department of Veterans
Affairs in 1999–2000 and 93 percent of such patients in 2000–2002,20 in
83 percent of patients with diabetes treated by commercial managed care
groups in the United States in 2000–2002, in 82 percent of patients
with diabetes treated by Pacific Northwest physician groups with
pay-for-performance programs in 2001–2002, in 64 percent of patients
with diabetes treated by California physician groups with
pay-for-performance programs in 2002–2003, in 89 percent of Medicare
patients with diabetes in 2004, and in 76 percent of Medicaid patients
with diabetes in 2004. For other aspects of diabetes care, including
blood lipid testing, eye examinations, microalbuminuria screening, and
influenza vaccination, performance in the first year of the new
contract also placed family practitioners in England on a par with
their better-performing U.S. peers.There is no baseline with
which to compare performance in the first year of the U.K. program,
although the quality of care was already improving before its
introduction. The high levels of achievement might suggest that the
targets were too easy to achieve. The scheme has been revised for
2006–2007: all minimum and some maximum payment thresholds have been
raised, 30 indicators have been dropped or modified, and 18 new
indicators have been introduced.24 The high achievement levels might
also have resulted from misreporting by practices. To counter
misreporting, Primary Care Trusts, statutory bodies responsible for the
delivery of health care in local areas, inspect all local practices and
undertake detailed audits of randomly selected practices and those
suspected of incorrect or fraudulent returns. The results of these
audits are not, however, publicly available.Because achievement
was universally high, there was little variation between practices. It
was not surprising, therefore, that socioeconomic and demographic
factors, which profoundly affect population health and the use of
health care facilities, had relatively little influence on achievement.
Although practices that served lower-income populations had worse
overall population achievement, the effect was small, and they were no
more likely to use exception reporting to exclude patients than were
practices with more affluent populations. Deprivation-related health
inequalities therefore appear unlikely to have been greatly increased
by the introduction of the financial incentive program. Smaller
practices performed marginally better overall than large ones, although
there was much greater variation in the performance of small practices,
and many smaller practices are believed to have merged in the face of
the administrative pressures from the new contract.Imputation
of rates of exception reporting was possible for only 30 of the
clinical indicators (39 percent), and we cannot determine how
representative these indicators were. There was a significant positive
relationship between rates of exception reporting and reported
achievement for these indicators, but the effect was small. It is
possible that practices that were better at identifying and treating
patients with chronic conditions also tended to identify more patients
for whom the targets were inappropriate. Alternatively, practices may
have "gamed" the new system. The generally low levels of exception
reporting suggest that large-scale gaming was uncommon. However, a
small minority of practices exception-reported a much larger proportion
of their patients: 91 (1.1 percent) excluded over 15 percent of their
patients. These practices warrant closer examination to determine
whether their use of exception reporting was appropriate.The
rate of exception reporting varied considerably according to disease
group. There were very low levels of exception reporting for
hypothyroidism and relatively high levels for mental health problems,
coronary heart disease, and chronic obstructive pulmonary disease. This
variation may reflect the nature of the indicators for each disease.
For example, to meet the main hypothyroidism target, practices were
required to record that a patient’s thyroid functions had been checked
in the previous 15 months. This was a relatively easy target to meet;
hence the achievement level was high and there was little reason to
exclude these patients. Since the indicator carried only a modest
financial reward of 6 points (£456, or $800), there was also little
incentive to game. In comparison, the main mental health indicator
required a review of medication, physical health, and coordination
arrangements with secondary care for patients with severe long-term
mental health problems. Not only would one expect legitimate exception
reporting to be higher for this indicator, but the incentive to game
would also be greater, since the indicator was worth 23 points (£1,748
or $3,050).Several lessons can be drawn from the U.K.
experience. First, the U.K. program was costly and was funded with
substantial additional monies rather than by restructuring existing
payment systems. In addition to the payments for achieving quality
targets, there were further costs, to both the practitioners and the
government, of developing and implementing the information-technology
systems required to monitor the program. Budget-neutral programs would
face greater resistance from family practitioners. Second, a clear
baseline is needed to avoid paying for improvements that have already
occurred. Third, geographically staggered introduction would enable
policymakers to better estimate the quality effects of the program.
Fourth, introducing pay-for-performance incrementally reduces risks for
providers and payers. Fifth, payers should allow for the possibility of
higher-than-expected achievement. Sixth, the risk of inappropriate
treatment can be decreased with the use of mechanisms such as exception
reporting, but monitoring is required to prevent abuse.The U.K.
experience suggests that greater changes in professional practice can
be achieved through pay-for-performance programs than previous research
indicates. We do not know whether the size of the financial incentives
made the difference in the United Kingdom, and if so, how big
incentives need to be. Whatever the case, financial incentives should
be aligned to physicians’ professional values to avoid serious
distortions of care.

All of which leads commente Arnold Epstein to believe that it’s going to happen here too soon with CMS leading the way on doctor pay. But there are big differences

In contrast with the British system, we can expect the CMS’s approach to extend beyond primary care physicians. In this country, specialists, including surgeons, receive a substantial majority of payments for physician services from the CMS. Because the CMS is unlikely to restrict its efforts to generalist physicians, we must develop a broader array of quality measures for specialists’ care to make this policy effective. 

We can also expect the continuing budget deficit to constrain the magnitude of payments. In the United Kingdom, pay for performance was adopted coincident with a substantial increase in funds provided to the National Health Service for payments to physicians. Thus, most physicians benefited from the new system, and no physicians saw their incomes decrease. In the United States, however, budgetary pressure will undoubtedly force the CMS to establish more modest initial financial incentives, probably on the order of 1 to 2 percent of payments to physicians — substantially less than the 5 to 10 percent often provided by health plans to provide sufficient impetus for doctors to change their practices. Of course, the British numbers are larger still — averaging approximately 30 percent before physicians paid any extra nursing or administrative costs. If larger incentives are needed, financial pressures to introduce budget-neutral policies will probably force the CMS to carve out quality bonuses from funds available for annual increases in payments or even from funds for existing payment levels, making some physicians winners and some substantial losers.

Then of course there’s the teeny tiny issue of whether with no more money this has a chance of not being torpoeded by the AMA and their ilk. We’ll see.

But this is clearly the biggest battle inside health care for the next few years.