Pay-for-performance system demonstrates cost savings and improves quality of services delivered in a public health breast and cervical cancer screening program

Although pay-for-performance (PFP) systems are being widely adopted in health maintenance organizations, hospitals and private practices, evidence supporting the effectiveness of these systems compared to capitation or fee-for-service systems is limited in public health programs. The intent of PFP systems is to reward healthcare providers who deliver quality healthcare services. The Colorado National Breast and Cervical Cancer Early Detection Program (NBCCEDP) provides free breast and cervical cancer screenings to low-income, uninsured women in a care system that includes local public health agencies, federally qualified health centers and rural hospitals. In July 2009, the program switched from a capitation system to a PFP system. The system provides increasing levels of reimbursement based on attainment of a definitive diagnosis within a specified period of time. After implementation of the PFP system, reimbursement demonstrates a cost savings, screening performance has increased and quality of care has improved. Comparing the first six months of last fiscal year (FY) (6/30/08-12/31/08) to the first six months of this FY (6/30/09-12/31/09), 6.9% more women have been screened and reimbursements to serve the additional women demonstrate a cost savings of $96,355. The number of women attaining a definitive diagnosis for breast cancer screening in 60 days or less increased from 91.9% (2,212/2,406) to 96.2% (1,147/1,192) and for cervical cancer screening, attainment of a definitive diagnosis in 60 days or less increased from 79.8% (83/104) to 90% (36/40). These findings suggest that implementing PFP systems in public health settings is a cost-effective strategy to improve healthcare quality.