IT PAYS TO REWARD TREATMENT PROVIDERS BY RESULTS

A government which pays substance-abuse treatment providers for results, not services, could foster improved quality of care and accountability, according to the Treatment Research Institute, in a study published in Health Policy. It was co-authored by Thomas McLellan PhD and colleagues from TRE in Philadelphia and by Jack Kemp, TRI consultant and former director of substance abuse services in Delaware.

They studied Delaware's results-oriented contracting system and concluded that providers "improved their ability to attract patients and keep them engaged in treatment longer – both signs of improved addiction treatment quality and accountability for services."

States typically pay providers on a fixed contract basis or based on the number of patients they treat. But Delaware switched to performance-based contracting in 2002, paying providers more or less depending on whether they met certain targets for capacity utilisation and retention of patients in treatment.

Between 2001 and 2006, capacity rose from 54% to 95%, while the average for patients actively participating in treatment for more than 30 days increased from 53% to 70%. The improvements were realised despite the fact that programmes tended to take in patients with more severe addiction problems over the course of the study.

"Substance-abuse treatment providers who stood to gain or lose financially under the contract system might have taken steps to make their services more appealing to patients and do more to integrate evidence-based practices," McLellan and Kemp said.

MAKING DETOX WORK.

Perhaps based on improvements already documented, Delaware later opened a new front on the government pay-for-performance experiment: using financial incentives to increase numbers of detoxification patients subsequently referred to and retained in rehabilitative care. Detoxification services are some of the most expensive state governments pay for, yet studies show marginal impact on long-term recovery when detoxification patients don't continue into rehabilitative care.

"The entire addiction field will be watching if Delaware is able to cut into its 'detox-only' rates through performance contracting," McLellan said.

BACKGROUND.

The unusual pay-for-performance system was undertaken in fiscal year 2002 by the Delaware Division of Substance Abuse and Mental Health when it replaced its cost reimbursement contracts with performance-based contracts with all outpatient addiction treatment programmes. Rather than the government reimbursing providers on a fixed basis (regardless of the number of patients treated), or for the number of addiction treatment services delivered (regardless of the results), the new model included financial rewards and penalties based on success or failure to achieve agreed-upon targets which most experts agree are predictive of accountability and effectiveness in drug and alcohol treatment: 80% and later 90% capacity utilisation, and active patient participation in treatment.

"Capacity utilisation" is the number of treatment slots filled by providers. "Active patient participation" is the length of time a patient stays in treatment, in this case, the percentage who stayed more than 30 days.

The experiment demonstrated marked increases on both indicators. Comparing 2001 -- the year before the performance contracting -- through 2006, average rates of patient capacity utilization increased from 54% to 95%; and the average proportion of patients who were actively engaged in more than 30 days of substance abuse treatment went from 53% to 70%.

IMPROVEMENTS DESPITE PROBLEMATIC PATIENTS.

Importantly, the changes were not due to programmes admitting more selectively. Indeed, there were significant increases in the severity of drug, alcohol and other problems presented by patients across the years of the incentives, the TRI study noted.

Kemp cited several factors which may have contributed to the performance improvement. Programmes integrated evidence-based practices into daily care and made other structural changes to make their facilities and services more appealing. More treatment venues, better proximity to the populations most needing services, more convenient hours of operation, and refurbished facilities were some of them.

Other steps the State took to make the experiment a success included efforts to engage addiction treatment providers as full partners from the outset, allowing them to select practices and procedures they thought would work – rather than forcing a specific set of practices – and re-designing reimbursement and auditing procedures to expedite provider payments, as well as promoting sharing of ideas and "lessons learned" among providers.

Although the TRI study found "clinically and financially significant changes" in the Delaware outpatient addiction treatment system that coincided with pay-for-performance, McLellan and Kemp warned against attributing the dramatic improvement exclusively to contracting changes when it is possible other forces played a role.

"Indications are that, relative to other system-wide efforts to improve treatment accountability, performance- based contracting is less costly and complicated to implement and seemingly compatible with other accountability initiatives," McLellan said. Kemp added that performance contracting "... is the type of intervention a small to mid-sized system can do within the limits imposed by most contemporary budgets."

The Treatment Research Institute is a not-for-profit research and development organisation specialising in science-driven reform of practice and policy in addiction and substance use.