Pay-for-performance initiatives based on their current focus are unlikely to reduce Medicare spending, according to a report released this week by the Commonwealth Fund.

Quality initiatives try to “stem the underuse of ‘effective care,'” the report said. One example is providing a beta blocker after a heart attack. This approach is unlikely to have an impact on healthcare costs, however, because it affects a small part of healthcare spending.

To affect Medicare costs, pay-for-performance strategies should target preference-sensitive care and supply-sensitive care, the report said.
Supply-sensitive care concerns the way resource availability governs the care provided and the frequency of its use, the report said. More than half of Medicare spending goes toward this type of care.

Preference-sensitive care also has a significant impact on Medicare and healthcare spending. It is based on a patient’s values and choices.

The Commonwealth Fund report is available at: