Cover: Pay for Performance in California's Workers' Compensation Medical Treatment System

Pay for Performance in California's Workers' Compensation Medical Treatment System

An Assessment of Options, Challenges, and Potential Benefits

Published Jul 1, 2008

by Barbara O. Wynn, Melony E. Sorbero

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Over the past few years, nonoccupational group health-insurance programs and health plans have implemented initiatives to improve the quality and efficiency of care through incentive programs, typically called “pay for performance,” or P4P. In addition, Medicare program administrators are evaluating how P4P incentives might be incorporated into Medicare payment systems. This paper assesses the options, challenges, and potential benefits of adopting P4P incentives for physician services in California's workers' compensation program. It offers three models that might be able to surmount the challenges, provided that the stakeholders have the commitment and trust to work through the design issues and allow the P4P program to evolve over time. P4P alone will not be sufficient to drive value-based medical care provided to injured workers; rather, it should be considered as part of a multipronged set of strategies designed to increase the efficient delivery of high-quality care that enables rapid and sustained return to work.

The research described in this paper was prepared for the Commission on Health and Safety and Workers' Compensation, California Department of Industrial Relations, and was conducted by the RAND Institute for Civil Justice and RAND Health, divisions of the RAND Corporation.

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