Is P4P Possible Without an EHR?

Published: Thursday, Jan 03, 2008
Pay-for-performance programs, in which providers are reimbursed at a higher rate if they can demonstrate that they deliver high-quality services, are being introduced in most states as part of an aggressive attempt at controlling healthcare costs without adversely affecting the quality of care. Indeed, many of these programs promise better quality as a result of being able to measure key indicators that are thought to drive clinical outcomes, as well as patients’ perception of the level of care.

At issue, however, is whether these programs can be effectively put in place ahead of the installation of complete electronic health records (EHRs). Many in the industry argue that, without an EHR, it will be impossible to establish controlled processes for the measurement of these indicators in a reliable manner, such that the measurements are truly comparable across providers, because the data necessary for these calculations will only be available after the problem of EHR

interoperability has been addressed. Others argue that P4P programs can be established, but they would consist of weak indicators with all the bureaucratic limitations of HEDIS-like calculations, citing similar data-availability issues.

This article will argue that a robust P4P program—with meaningful indicators and an affordable mechanism for auditing and verifying the measurements—can indeed be established in advance of universal availability of EHR technology. In fact, the greatest barriers to such a program are not rooted in the availability of data, but rather in the adoption of regional data-sharing agreements among all the industry players.


The healthcare industry, which accounts for approximately 15% of the US gross national product, is poised for a radical transformation aimed at reducing the rate of growth of its costs and at increasing the quality and reliability of its services. The industry is universally perceived to have high costs, and the traditional view that high costs correlate with high medical quality are being challenged by a crude but effective first pass at the measurement of healthcare outcomes—which suggests otherwise. Driving this transformation is the work of a coalition of large payers (including the employers and the government), insurers, and providers, and its primary vehicle will be an overhauled payment system for healthcare services.

In order to complete the transformation, the industry must be able to measure the “value” and the cost of the healthcare delivered. These measures must be objectively derived from information in the medical record, and must be comparable across providers. The cost of obtaining the information used in the measures would, ideally, not significantly exceed the costs already incurred in documentation of the medical record, or else the measurement process will itself make

healthcare less affordable.

The EHR does not help much

We will start our argument by debunking the idea that the EHR will make the task of creating a robust P4P program much easier. Everyone involved in the measurement of healthcare agrees that coordinating the efforts necessary to create such a program is a difficult task. But how would an EHR simplify this?

Claim #1: EHRs make available all the data that is needed to calculate the P4P measures.

This is patently untrue. Most of the data elements necessary to calculate clinical P4P measures are already available in other electronic systems that are much more common than EHRs. Lab values are available from lab systems and lab vendors. Demographics, procedures, and diagnoses are available from billing and registration systems. Pharmacy data is available within the dispensing industry and from the payers (insurance companies and the government).

Visit-utilization information is available from scheduling and billing systems. While the EHR contains additional clinical information, much of it is in text form (progress notes, for example) and is not readily of use in refining a P4P program.

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