Reilly warned to hold back on 'pay for performance' health service plan
HEALTH Minister James Reilly has been warned that performance payments for health providers such as hospitals should not go ahead at this stage.
The idea of "money following the patient" has been hailed as the way forward by Dr Reilly.
He wants to end the system of block grants for hospitals and instead base financial rewards on the numbers of patients treated.
The idea is that this promotes greater efficiency and better value for money, because, for instance, providers are incentivised to do more surgical operations.
It would also lead to greater transparency about where funding was going.
However, the ESRI study, to be presented to a conference on economic renewal today, says "there is insufficient evidence to support the introduction of pay-for-performance schemes in the Irish healthcare system".
ESRI researchers examined pay-for-performance schemes operating in the US, UK, Australia and Germany, to see what lessons Ireland might learn.
It found that:
• Many of the payments-for-performance schemes currently in place have not yet been properly evaluated, particularly in terms of their cost-effectiveness.
• Even where appropriate evaluation has been conducted, there is no clear evidence that pay-for-performance has improved quality and efficiency in healthcare.
• A new generation of pay-for-performance programmes is currently being developed with a particular focus on improving quality and value for money by promoting greater integration across healthcare providers.
The study by researchers Anne Nolan, Jacqueline O' Reilly and Samantha Smith concludes that "pay-for-performance should not be considered at least until the many complexities in financial incentives in the current system are resolved".
They added: "As the second-largest component of public expenditure, healthcare is particularly vulnerable to the effects of the current fiscal crisis.
"International evidence highlights the importance of how we pay providers in healthcare, and pay-for-performance is now a common feature of many healthcare systems.
"However, we find there is insufficient evidence of significant positive effects of current pay-for-performance initiatives in health care.
"On this basis, and in the context of an already complex set of financial incentives in Irish healthcare, we conclude that pay-for-performance should not be considered at this time," the researchers said.
Complexities in the current system include the practice whereby it is more profitable for health insurance companies to have their private patients treated in public hospitals, because of the subsidies involved.
However, this has an adverse effect on bed availability for public patients.
In the Budget, Dr Reilly indicated that this would change in the future and that the subsidies would diminish.
Health insurance companies will face paying more for the care of private patients in public hospitals.
The ESRI also points out that in the context of the current fiscal crisis, securing greater value for money in healthcare is crucial. And the authors added that the payments-for-performance could also potentially apply to GPs.
"Pay-for-performance schemes are being increasingly adopted internationally," the study said. "The recent Programme for Government also includes commitments to reform the way in which GPs and public hospitals are paid."