Incentive-Based Primary Care: Cost and Utilization Analysis

CONTEXT: In its fee-for-service funding model for primary care, British Columbia, Canada, introduced incentive payments to general practitioners as pay for performance for providing enhanced, guidelines-based care to patients with chronic conditions. Evaluation of the program was conducted at the health care system level. OBJECTIVE: To examine the impact of the incentive payments on annual health care costs and hospital utilization patterns in British Columbia. DESIGN: The study used Ministry of Health administrative data for Fiscal Year 2010-2011 for patients with diabetes, congestive heart failure, chronic obstructive pulmonary disease, and/or hypertension. In each disease group, cost and utilization were compared across patients who did, and did not, receive incentive-based care. MAIN OUTCOME MEASURES: Health care costs (eg, primary care, hospital) and utilization measures (eg, hospital days, readmissions). RESULTS: After controlling for patients' age, sex, service needs level, and continuity of care (defined as attachment to a general practice), the incentives reduced the net annual health care costs, in Canadian dollars, for patients with hypertension (by approximately Can308 per patient), chronic obstructive pulmonary disease (by Can496), and congestive heart failure (by Can96), but not diabetes (incentives cost about Can148 more per patient). The incentives were also associated with fewer hospital days, fewer admissions and readmissions, and shorter lengths of hospital stays for all 4 groups. CONCLUSION: Although the available literature on pay for performance shows mixed results, we showed that the funding model used in British Columbia using incentive payments for primary care might reduce health care costs and hospital utilization.