News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups
Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups
Hosted by Robert Michel
Sign In

Early Lessons from Provider Pay-for-Performance Program in Britain

Oct 16, 2006 | Laboratory Management and Operations, Laboratory Pathology

Pay-for-Performance programs are not limited to the United States. In 2004, the National Health Service (NHS) of the United Kingdom introduced a pay-for-performance program for family practitioners with much acclaim. A study called Pay for-Performance Programs in Family Practices in the United Kingdom published in the New England Journal of Medicine in July of this year reported findings on the success of the program in its first year.

The National Health Service in the UK committed £1.8 billion ($3.2 billion) in additional funding over a period of three years for the pay-for-performance program for family practitioners. The program would increase practitioners’ income by up to 25%. Incentives were based on practitioners’ performance with respect to 146 indicators covering clinical care for 10 chronic diseases, organization of care, and patient experiences.

It was reported that in the first year of the new pay-for-performance program, 95.5% of practices scored highly, earning them an average of £76,200 ($133,200) each. The pay-for-performance program increased the gross income of the average family practitioner by £23,000 ($40,200), but this was partially offset by the fact that practitioners were responsible for both the nursing and the administrative costs of meeting the targets.

It cannot be denied that the UK pay-for-performance program improved quality of patient care in its first year. Doctors in the UK were awarded a significant bonus and could justify the cost of improving their practices with equipment, training, and additional staff to achieve high quality scores. Unfortunately, this may not be the case with Medicare and Medicaid pay-for-performance programs in the United States.

Federal legislation directed the pay-for-performance model to be adopted in the U.S. by mid-2006. The Centers for Medicare and Medicaid (CMS) will then begin rewarding high-performing doctors, hospitals, health plans, and other providers. Unfortunately, according to another study in the New England Journal of Medicine – Paying for Performance in the United States and Abroad – the U.S. budget will only allow for bonuses of 1 to 2%, while the United Kingdom was able to provide 5 to 10%. These smaller bonuses might not be enough incentive for US physicians to meet high performance standards because the cost of upgrading their practices may eat up the entire bonus.

Already the number of pay-for-performance programs offered by private payers is increasing each year. As grades and rewards are directed to doctors based on their performance, it increases the likelihood is high that they will select labs based on reputation and quality. Furthermore, the CMS may adopt pay-for-performance programs for laboratories that provide them with incentives based on their turnaround time, the accuracy of their results, and other performance factors. Laboratories should be tracking the pay-for-performance trend to understand what indicators are likely to be used to evaluate and reward clinical labs.

Hot Trends in Canadian Laboratory Management

Oct 2, 2006 | Laboratory Management and Operations, Laboratory Pathology

Last Monday and Tuesday, many of Canada’s most progressive laboratory administrators and pathologists gathered to attend Executive Edge in the beautiful Canadian city of Toronto. Executive Edge is a Canadian version of The Dark Report’s famous Executive War College (EWC). Like the EWC, Executive Edge produced some remarkable stories of innovation and creativity in laboratory management.

Executive Edge is produced by The Dark Report and QSE Consulting of Ontario, Canada. This is Executive Edge’s second year and it is helping to identify laboratory management best practices that can be used by almost any laboratory in any country. Laboratory medicine is a dynamic specialty in Canada and laboratories in that country are under sustained pressure to evolve, to adopt, and to survive.

Lab leaders in the United States will not be surprised to learn that our counterparts to the north are plagued by the same basic pressures. Funding for laboratory services is inadequate. At the same time, patient demand clinician utilization of laboratory testing increases annually, often at near double-digit rates. It also goes without saying that the supply of medical technologists, Ph.D.s, and pathologists is inadequate-and will increase rapidly as those baby boomers now working in laboratories take their retirement.

What may surprise many lab managers and pathologists in the United States is how laboratory organizations across Canada are responding with innovative management strategies. Because each province runs its own healthcare system-and has its own unique challenges-there is an opportunity for pathologists and lab directors to experiment with new lab organizational models.

Over the next few weeks, Dark Daily will share some of the more interesting and relevant innovations with you. In the late 1980s and early 1990s, Canadian laboratories were far ahead of U.S. labs in creating regional lab networks and undertaking radical lab consolidation projects. Already in this decade, some Canadian lab organizations are breaking new ground in their attempts to make shrinking lab budgets go farther and do more for their clinicians. Upcoming Dark Daily briefings will share these innovations, along with some of the secrets that made them successful.

;