Business Case

Provider Efficiency White Paper - The Business Case for Pay-for-Performance

The work contained in this White Paper reflects the efforts from health plans, employers, consultants, and providers to define a set of recommendations - Best Practices - that have the potential to improve the measurement of provider efficiency and the science behind it. While the paper focuses on efficiency, all the contributors acknowledge that measuring efficiency should be done in conjunction with measuring effectiveness of care, so that consumers, purchasers and payers can better understand and identify the value of the services being delivered, and providers can better understand the steps they need to take to improve the value of services offered.

None of the parties would suggest that these are the final (or the only) word in provider efficiency measurement, quite the contrary, which is why we have referred to this paper as Version 1.0. Nor do we suggest that all recommendations should be adhered to strictly. In fact, we recognize that many readers of this paper will struggle with how to implement some of the recommendations, or with how it will impact their organization. In doing so, they should recognize that, as an industry, we are still in the early stages of developing adequate universally accepted rules on how to measure the efficiency with which doctors, hospitals and other care providers deliver services. As such, it will be extremely important as we go forward to closely collaborate and create a community of continuous learning, understanding better the power of analysis when some of the recommendations are not applied as opposed to being applied. Continuing the experimentation will allow all of us to arrive at a better model, and we are committed to updating the recommendations periodically to reflect new findings.

This continuous learning should be approached in the same spirit as the development of the Linux software code - anyone can take what we have, but contribute back any improvements you can make. It is only through this sort of collaboration, where best practices will be shared openly, that we can advance the science, reduce the barriers to implementation and jointly create a better health care system. To that end, an on-line forum has been set-up at where the discussion we have started here can be continued.

As referenced in the White paper, the documents below refer to Hospital efficiency and the need for mission-adjustments, they detail findings from a study about what adjustments to make and how to make them.