Evaluation of a Prescription Drug Pay-for-Performance Program: Impact on Prescribing Trends, Budget, and Patient Outcomes

Abstract

Background Health plans have incentivized providers for patient care that follows evidence-based prescribing, including through pay-for-performance (P4P) programs. Research has suggested increased cost-sharing for prescription drugs is associated with lower adherence and higher utilization of other health care services. Therefore, one potential way to lower overall health care costs is to optimize prescription drug expenditures by promoting an increased proportion of generic drug use. This study evaluated a state-sponsored, clinic-level prescribing P4P. Methods We performed a retrospective cohort study evaluating Uniform Medical Plan’s (UMP’s) 2007-2008 Generic Incentive Program (GIP). Using administrative claims data, we compared annual generic dispensing rates (GDRs) of participating and non-participating clinics using generalized estimating equations (GEE). Using interview survey data, we sought to understand program elements that may be important predictors of engagement in and success with this type of program. We calculated budget savings as a result of increased generic dispensing rates (GDRs) by GIP clinics compared to the costs of administering the program. Finally, we compared emergency department visits and hospitalizations for patients who sought care from participating and non-participating GIP clinics, also using GEE. Results Program participants had a non-statistically significant difference in GDR during the GIP. Most clinics had clinical infrastructure to support informed prescribing and a contemporaneous incentive program that targeted prescribing. Few clinics informed their providers that their performance was being evaluated, shared incentives with them, or discussed quarterly prescribing report cards. Program administrative costs amounted to $250,795, which was the total budget impact of the GIP. The 2.61% systematically higher GDR by GIP participants year over year amounted to a two-year savings of $1,998,633. We found no association between program participation and increased odds of emergency department visits or hospitalizations. Conclusion Clinic-level P4P program participation and increased GDR were not related. UMP’s GIP participating clinics demonstrated a savings of over $1.9 million resulting from systematically increased GDRs without compromising patient health-related outcomes. Overall, the results of this study suggest that stronger incentives to increase generic prescribing could produce substantial cost-savings without compromising patient health-related outcomes.