Pay for Performance
For the past five years, we have been tracking the diffusion and impact of pay for performance in the U.S. health care market. Our 2004 paper in Health Affairs described a new generation of pay-for-performance programs and proposed a framework for evaluating the economic incentives associated with these efforts. The chief insight of the paper was to highlight the mismatch between the design of first-generation pay-for-performance programs and the objective of quality improvement. Subsequently we examined the early effects of a prototypical physician pay for performance program begun in 2003. Our findings showed little quality improvement among medical groups subject to the incentive relative to a contemporaneous comparison group. We also demonstrated that historically high-performing medical groups improved the least, consistent with the fact that the bonus was contingent upon attainment of the same fixed level of performance for all groups.
- Rosenthal MB, Fernandopulle R, Song HR, and Landon BE. Paying for Quality: Providers’ Incentives for Quality Improvement, Health Affairs, 23(2):127-41, March-April, 2004.
- Rosenthal MB, Frank RG, Li Z, and Epstein AM. From Concept to Practice: Early Experience with Pay-for-Performance. Journal of the American Medical Association, 294(14): 1788-93, October 12, 2005.
- Rosenthal MB and Frank RG. What is the Empirical Basis for Quality-based Incentives in Health Care? Medical Care Research and Review, 63(2):135-157, April 2006.
- Rosenthal MB, Landon BE, Normand S-LT, Frank RG, Epstein AM. Pay for performance in commercial HMOs. New England Journal of Medicine. November 2, 2006;355(18):1895-1902.
- Rosenthal MB and Dudley RA. Pay-for-Performance: Will the Latest Payment Trend Improve Care? Journal of the American Medical Association, 297(7):740-43, February 21, 2007.
- Rosenthal MB. Pay for Performance and Beyond. Expert Review of Pharmacoeconomics and Outcomes Research, 7(4):351-6, August 2007.
- Rosenthal MB, Landon BE, Song HR, Howitt K, Epstein AM. Climbing Up the Pay-for-performance Learning Curve: Where Are the Early Adopters Now? Health Affairs 2007 Nov-Dec;26(6):1674-82.
Consumer-directed Health Plans
Many employers and conservative politicians have embraced health benefit models that depart from managed care and use consumer cost sharing coupled with information as the basis for rationalizing utilization and improving the value of spending. In a series of papers, we explored the so-called “consumer-directed” health benefit movement in depth, including a national health plan survey and a series of case studies. In addition to estimating the uptake of consumer-directed health plans, we described the design and structure of the different consumer-directed health plans models, and critically examine the reported effects of these plans on consumers.
- Rosenthal MB and Milstein A. Awakening Consumer Stewardship of Health Benefits: Prevalence and Differentiation of New Health Plan Models. Health Services Research, 39(4): 1055-1070, August 2004.
- Rosenthal MB. Doughnut-hole Economics. Health Affairs, 23(6):129-35, November-December, 2004.
- Rosenthal MB, Hsuan C. and Milstein A. A Report Card on the Freshman Class of Consumer-directed Health Plans. Health Affairs, 24(6):1592-1600, November-December, 2005.
- Rosenthal MB and Daniels NB. Beyond Competition: the Normative Implications of Consumer-Driven Health Plans. Journal of Health Politics, Policy, and Law. 2006;31(3):671-686.
Direct-to-Consumer Advertising of Prescription Drugs
There is public concern about the potential for direct-to-consumer advertising (DTCA) of prescription drugs to result in inappropriate prescribing and higher costs of care. Guidelines regarding advertising to consumers through electronic media issued in 1997 by the FDA are cited as being responsible for unleashing a flood of DTCA. We undertook several related studies to examine empirically the rise of direct to consumer advertising of prescription drugs following the 1997 issuance of FDA guidelines on broadcast advertising and the effects on prescription drug spending and quality of care. Our early work suggested that while DTCA had grown in importance, it remained a minor component of all pharmaceutical promotion. Moreover, while DTCA increase prescription drug sales this appeared largely to operate through class-wide increases rather than brand shares. More recently, we revisited trends in DTCA and the FDA’s regulation of such advertising. Total pharmaceutical promotion grew from $11.4 billion in 1996 to $27.8 billion in 2005. The number of regulatory warning letters sent by the FDA to pharmaceutical manufacturers in violation of drug advertising regulations fell from 142 in 1997 to only 21 in 2006. Our findings suggest that recent regulatory changes may have weakened the FDA’s ability to restrict misleading advertising.
- Rosenthal MB, Berndt ER, Frank RG, Donohue JM, and Epstein AM. Promotion of Prescription Drugs to Consumers, New England Journal of Medicine, 346(7):498-505, Feb. 2002.
- Mello M, Rosenthal MB, and Neumann PJ. Direct-to-Consumer Advertising and Shared Liability for Pharmaceutical Manufacturers, Journal of the American Medical Association, 289(4): 477-81, Jan. 22, 2003.
- Commentary on The economics of direct-to-consumer advertising of prescription-only drugs: prescribed to improve consumer welfare? Journal of Health Services Research and Policy, 8; 2003.
- Rosenthal MB, Berndt ER, Donohue JM, Epstein AM, Frank RG. Demand Effects of Recent Changes in Prescription Drug Promotion. In Frontiers in Health Policy Research, v. 6, David M. Cutler and Alan M. Garber, editors, MIT Press. June 2003.
- Donohue JM, Berndt ER, Rosenthal MB, Epstein AM, and Frank RG. Effects of Pharmaceutical Promotion on Adherence to Guideline Treatment of Depression. Medical Care, 42(12):1176-85, December 2004.
- Rosenthal MB, Donohue JM. Direct-to-Consumer Advertising of Prescription Drugs: A Policy Dilemma. In Ethics, Public Policy, and the Pharmaceutical Industry in the 21st Century, ed. M. Santoro, Cambridge University Press, 2006.
- Donohue JM, Cevasco M, Rosenthal MB. A Decade of Broadcast Advertising of Prescription Drugs. New England Journal of Medicine, 357(7):673-81, August 16, 2007.