Research Methods and Critics Direction

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Research Methods and Critics Direction

Healthcare cost in the US has become an issue of concern among all stakeholders of the healthcare systems. The UnitedState spends more billions on healthcare sector than any other country in the world. In 2008 the expenditure on the health sector was estimated to constitute 30% of the entire government expenditure (Hepburn et al, 2007). Various reasons have been attributed to the rising healthcare cost. The commonly mentioned reasons include; the third party payment system, aging population and increased life expectancy, healthcare technology, large number of uninsured and chronic diseases.The private sector in the US meets 50% of the healthcare expenditure while the government meets 46% of the total expenditure through its various programs (AmericanCollege of Physicians, 2008). These government programs are such as Medicare, Medicaid and Veteran Administration. Out of pocket spending is relatively low in the American healthcare system.

Medical technology is of the highest state in the US (AmericanCollege of Physicians, 2008). The US healthcare sector has invested colossal sums of money in the Research and development of medical and biotechnology technology. Chronic ailments are such as diabetics, cancer, heart problems and high blood pressure among others. The number of people suffering from chronic diseases has been increasing with time. Most of these increases are attributed to change in lifestyles of the American society. Obesity is one ailment that is growing in the list of chronic illness.  The healthcare system spends billions of dollars in treating these chronic ailments.Despite these huge spending on healthcare, Americans are not getting better quality healthcare (Jeffery, 2009). The system is costly while the services remain below standard.

For this reason stakeholders in the healthcare industry have been looking for systems that would change this situation. Studies have been conducted and various suggestions have been made on measure that can be used to effectively reduce healthcare cost and raise the quality of services. Increased government role in healthcare, investments in IT that would drive healthcare savings and changing the payment system are some of the commonly mentioned alternatives. Perhaps the most advocated system for curbing increased healthcare cost and low quality healthcare is the performance based healthcare system. There has been push from various stakeholders for the adoption of the pay for performance system of healthcare as panacea to the problems the healthcare system is currently experiencing.   


Performance Based Healthcare

Performance based healthcare refers to a healthcare system structure where medical service providers are paid based on performance or outcome rather than processes (Lindenauer et al, 2007). For a long time physicians and healthcare facilities have been paid the same regardless of the quality of healthcare services they provide. The performance based system provides an outcome based measures for healthcare facilities and reimbursement appraisal formulae for health physicians which will determine their pay.  Performance based healthcare was viewed as a structure that would see improved effectiveness of healthcare services by focusing on outcomes and rewarding solutions (Afkhami, 2007). This structure of healthcare system targets to fund healthcare projects based on their outcome while ensuring effective utilization of the funds.Performance based healthcare moves away from traditional patterns of controls while budgeting for healthcare to performance measurements and outcome focused patterns. Recent studies have indicated that this new system of healthcare services provision has led to considerable cost containment in healthcare spending. However, there are still some documented challenges that portray some problems in this system of healthcare provision.

Recent Studies on Performance Based Healthcare

Proponents of the performance based healthcare system have argued that this system will bring positive impacts on healthcare in terms of quality and costs. Petersen et al (2006) are some of the proponent of this system of healthcare.  Petersen and the group have presented the idea that; introducing financial incentives will make physicians and hospital to improve their service performance.  Petersen et al (2006) conducted a study to investigate the impacts this financial incentive would have on the quality and cost aspects of healthcare.  In this study, the researchers analyzed previous studies assessing effects of incentives for improved performance on healthcare.  Petersen and the group analyzed 17 studies that examined this relationship. These primary sources of data were efficient tools for obtain information to support their argument. However, depending on secondary sources may have introduced some degree of inaccuracy as these sources may have been carrying the writers’ subjected opinions.

 The sources also present the situations as at the time the studies were conducted and these situations may have changed at the time Petersen et al were conducting their study. The study by Peterson et al concluded that though there are some negative impacts of introducing incentives in the healthcare system, the positive impacts far outweigh the negative impactsKutzman et al (2011) also conducted a similar study to investigate the impact of incentives on healthcare. The study intended to investigate whether the hospital acquired condition policy would translate to any cost reduction or benefit for the healthcare system. Kutzman et al (2011) conducted 77 semi-structured interviews with hospital leaders, unit nurses in 25 different hospitals. Use of semi-structured interviews was an efficient means to collect data, as it does not limit the subject to fixed and predetermined questions. Use of interview also increased the accuracy of information as the researcher could easily discern whether the respondent is telling the truth due to the direct contact between the researchers and subjects.

Two stage purposive sampling were used to select participants to the study. The first stage was for selecting the hospital establishments where institutional characteristics such as location and size were the deciding criteria. The second stage was used in recruiting subjects who were selected based on their diverse experiences and perspectives. Use of purposive sampling ensured that subjects and establishment with desired characteristics are selected. However, this may have tilted the results as it was the researcher themselves who were deciding on the appropriateness of the participants.Kutzman (2011) study found out that, most subjects felt that the performance based healthcare system had improved operations of healthcare facilities. This is generally in term s of physician’s attitudes and performance, evolution of hospital learning environment and creation of a competitive drive among hospitals. However, nurses expressed concern that the reimbursement system may lead to reduction in the number of nurses when funding to institutions is reduced due to performance as they make up the largest recipient of hospital’s direct funds.   

 Shifting to the broad concept of Performance based healthcare will in itself alone not automatically translate to reduced cost of healthcare and increased effectiveness and transparency. More specific policies and measures need to be designed and implemented. However, in order to come up with these policies the healthcare system need to analyze its needs and learn from other systems in order to capitalize on their success and avoid their limitations.   A study conducted by AmericanCollege of Physicians (ACP) (2008) aimed at developing a policy paper which will provide lessons for the United States healthcare systems. This study examined and described the current situation of the healthcare system in the country. This part of ACP methodology was crucial as by studying the system, ACP was able to understand the system’s strength and weaknesses before embarking on finding ways for improvements.

AmericanCollege of Physicians (2008) then provided a detailed analysis of the healthcare systems of 12 other industrialized countries while providing a comparison with the US system. The last part of ACP methodology was to provide recommendations based on their scrutiny of the healthcare systems of the other countries.The AmericanCollege of physician (2008) utilized secondary sources of data in this study. These source are such as; statistics, previous studies and reports. ACP also made use of the Commonwealth indicator of “high performance” score card that is used to measure performance of different healthcare system in the world.

 Secondary sources were the most appropriate and realistic sources to use due to the nature and scope of ACP study which covered 12 countries from different parts of the world. ACP study confirmed that the American healthcare system is the most expensive among the industrialized nations. This is due to the high cost mainly attributed to the payment system, aging baby boomer population and technology. According to the study a minority of the American population generate much of the American healthcare cost. These are the likes of the uninsured and the chronically ill. Lack of a system that would provide coherent measures for taking care of such groups has led to the strain in the American public insurance programs.

 The common wealth performance indicator gauges healthcare systems based on 6 categories. These are; Long, healthy and productive lives; quality; access; efficiency; equity; capacity to innovate and improve. Comparison of the United States healthcare performance based on these categories gave the conclusion that the system needs improvements in order to make it effective. Unlike other developed countries, the US system uses more of a volume based payment system rather than an imbursement based system making it less effective. One key lesson provided in this study is that performance measures and active monitoring of performance are key element of healthy healthcare systems. Another limitation of the performance based system in the US that may be contributing to high cost of healthcare is highlighted by Hepburn.  According to Hepburn et al (2007) the performance based healthcare system still lacks methodologies for balancing between investment expectations and healthcare performance and accountability goals.

This scenario brings about budgeting challenges as it is difficult to get standard mechanisms for evaluating value and outcome of projects.  Public healthcare systems usually differ in terms of structure, management and ways of operation from one jurisdiction to the other. These differences in healthcare systems coupled with the complex nature of  performance based healthcare administration has limited the establishment of a common framework for monitoring public health revenue sources and expenditures in various local jurisdiction.Hepburn et al (2007) argues that the public health system lacks concepts, statistics and structures to provide consensus in the ways projects are funded and evaluated in order to ensure efficiency. There need to be structures that will ensure that a link exist between financing and evaluation criteria and more understandable concepts of healthcare such as spreads of diseases and promoting healthy lifestyles. Hepburn et al (2007) conducted a study which aimed at identifying and testing a framework that could provide a basis for performance based budgeting.

 Hepburn’s study focused on the state of Georgia public health financial data. This study first involved conducting a review of literature in order to understand approaches commonly used in developing public health budgets. The study also involved holding a focus group with Georgia public health system stakeholders. This focus group was aimed at providing insights into the current budgeting system and to suggest features that would be important in the new structure. Consultations were also held, with the state and national budgeting official, which aimed at getting a better understanding of the challenges of existing budget system and desired objectives for a new budget system.Lack of a common framework for guiding budgeting for health project has various implications among them is failure to identify and reward good performance. Hepburn’s study was geared towards addressing these challenges by providing a clear defined performance budgeting system. This would ensure that; resource allocation meet population needs, efficiency in performance and incorporation of broad category of services. 

Besides this, a common framework will also ensure that performance based healthcare is able to curb cost of healthcare as was originally intended.  Many stakeholders in the healthcare industry view performance based healthcare as the way forward from the American healthcare system. However, there are few stakeholders who still hold reservations concerning this system of healthcare provision. Some opponent to the performance based healthcare system have argued that the system will widen the gap in terms of healthcare access between the poor and well served while others argue that this system will lead to reduced autonomy of physicians and ethical issues.   Larriviere and Bernat (2008) are some of the opponents of the performance based systems. These two have argued that performance based system is negative in a number of ways. One of them is that it reduces the autonomy of physicians. Under the performance based system decision making in healthcare is incentivised.

Larriviere and Bernat (2008) have argued that incentivizing healthcare decision may sacrifice physician autonomy to political and social forces. This system provide motivation for making decision in regard to the alternative that will provide the most incentives rather than the alternative that will translate to improved healthcare. A study conducted by Larriviere and Bernat (2008) indicate that there are physician who have already braced themselves for pay for performance healthcare for personal gains rather for quality improvements. This article presents the fear that a situation may arise where physician will select patients in order to benefit from the incentives thereby having adverse effects on the doctor patient relationship.  Another opponent to the performance based healthcare system is Satin (2006). Satin (2006) has argued that this system will make sick people sicker, health facilities in deplorable conditions worse and affect doctor patient relationships. Satin conducted a study in the State of Minnesota to establish how the pay for performance system will affect provision of healthcare.

Satin (2006) used a survey based approach to have citizens provide their feeling about the programs. Satin (2006) did set up an academic healthcare booth in the MinnesotaState fair. Then visitors streaming into the booth were asked to respond to three questions.  Satin (2006) choice of methodology was appropriate as holding the academic booth during the fair ensured that the study would receive responds from various backgrounds and locations within the state. Locating the booth in a public place enabled the study to receive a large number of respondents therefore increasing the scope of the study and therefore the accuracy of the representation of his sample. Satin (2006) findings presented various ethic issues concerning the pay for performance healthcare system. These include; widening disparities in terms of healthcare access and quality, reduced doctor-patient relationship and adverse effect on physician conduct as they change their behaviors based on reimbursement.   

 Future Research

There are various issues that current researches on performance based healthcare have not covered or have covered sparsely. One of these areas is the development of standard measures for monitoring performance and outcome. As Satin (2006) argues different locations have different needs and experience different circumstances. Therefore, it is difficult to determine a model that will ensure measures for performance do not lead to marginalization of some members of the society but which will also ensure transparency and equity in the way performance is measured.There are also limited studies conducted to examine capacity of healthcare institutions to implement this system. Some hospitals may lack system for providing statistics and data that would be used to measure performance. Studies need to be conducted to suggest ways in which healthcare facilities can fully implement this system. Various negative sentiments have also been expressed against the performance based healthcare system. Satin (2006) has expressed genuine concern about the possibility of the system to propagate unethical behavior among practitioners and to bring more disparity in terms of healthcare access.  

Future research should address these concerns and develop measures that would respond to such situations.In summary, performance based healthcare was introduced as means for ensuring healthcare funds are utilized effectively and that the quality of healthcare is improved. Various studies have indicated that this system of healthcare has potential of producing positive impacts on the American healthcare system. However, a few people still have concerns about the negative impacts that this system is likely to have on healthcare. These concerns are genuine and need to be address in order to incorporate every stakeholder into working towards the same vision. There are also a few issues that need to be addressed so that the effectiveness of this system can be improved. Some of these issues include formulating policies to support and regulate the system and also developing a measurement criterion that will ensure fairness and transparency.  


AmericanCollege of Physician (2008). Achieving a High Performance Healthcare System with Universal Access: What the United States Can Learn From Other Countries. Annals of Internal Medicine, 148 (1), 55-75

Afkhami H. et al (2007). Making Performance-Based Funding Work for Health. Journal of Plos Medicine, 4 (8)

Larriviere G. & Bernat J (2008). Threats to Physicians Autonomy in a Performance- Based Reimbursement System. American Academy of Neurology, 70 (24), 2338- 2342

LindenauerPK, et al (2007).Public reporting and pay for performance in hospital quality improvement. N Engl J Med. 356(5):486–9

Hepburn V. et al (2007). Structuring a Framework for Public Health Performance- Based Budgeting: A Georgia Case Study. Journal of Public Health and Practice, 13 (2), 173- 179

Jeffery (2009). The Impacts on Healthcare Cost for American Companies. Journal of Healthcare Technology, 3

Kutzman E. et al (2011). Performance-Based Payment Incentives Increase Burden and Blame for Hospitals Nurses. Health Affairs Journal, 30 (2), 211- 218

 Satin D. (2006).The Impact of the Pay for Performance Beyond Quality Markers- A Call for Bioethics Research. University of Minnesota Center for Bioethics, 10 (1), 1-3


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