Pay-for-Performance Concept Gaining Traction in Healthcare, Survey Finds

Thomson Medstat Conference Showcases Successful Efforts to Manage Healthcare Costs Across Industry Sectors

Ann Arbor, Mich, 04/28/2006, Healthcare pay-for-performance programs are taking root — although the lack of impartial, objective research evaluating their effectiveness is impeding faster adoption and growth, according to a survey of healthcare executives. Thomson Medstat, a healthcare information business, released the survey results today at its annual customer conference, Connection 2006, in Phoenix, Ariz. Medstat is part of The Thomson Corporation (NYSE: TOC; TSX: TOC).

Pay-for-performance (P4P) programs aim to improve healthcare quality and manage healthcare costs by rewarding physicians, hospitals, and other providers that deliver efficient, effective care. Thomson Medstat surveyed nearly 300 managers and executives from hospitals, health plans, large employers, and government health agencies for their views on and experience with P4P programs. A total of 154 participated in the survey for a response rate exceeding 50 percent. Among the findings:

* 42 percent said their organizations currently are involved in P4P activities and 44 percent expect to participate in P4P activities in 2006.
* 85 percent said P4P is, or could be, valuable to their organization. This includes
* 41 percent who described it as very or extremely valuable.
* Respondents who are involved with P4P initiatives said the top benefits of these efforts are improved patient health and reduced medical costs.

Jeffrey Hanson, vice president and practice leader for pay-for-performance at Medstat, presented the survey results today to more than 300 healthcare leaders at the Medstat customer conference. Hanson said it’s significant that almost half of the respondents said their organizations are involved in P4P initiatives, and nearly all of them described these activities as successful. Among those whose organizations are not planning P4P activities, many pointed out the lack of robust evaluations of these programs by impartial researchers.

“There clearly is a significant and growing interest in the pay-for-performance concept, although the dearth of objective studies about its effectiveness is an obstacle,” Hanson said. “P4P is, relatively speaking, in its infancy and the funding has not been available for this research.

“All sectors of the healthcare industry agree, however, that we need to realign the incentives for delivering high quality, cost effective care,” Hanson said. “Federal and state governments, health plans, and employers are coming together around a common belief — that rewarding good quality and better value will improve our healthcare system.”

The four-day Thomson Medstat conference concludes today. The annual event gathers healthcare leaders from major U.S. corporations, health plans, hospital systems, and state and federal agencies to discuss their challenges and successes in managing healthcare costs and quality. Connection 2006 featured case studies showcasing Medstat customers’ use of healthcare information, analytics, and technology to guide organizational decisions and deliver measurable results. More than 40 educational sessions addressed salient issues including consumer-driven healthcare, disease management, workplace wellness programs, identifying high-risk patients, and improving clinical quality. Keynote addresses were delivered by Kenneth Kizer, CEO of Medsphere and past president of the National Quality Forum, and Neeli Bendapudi, associate professor and director of the Institute for Managing Services at Ohio State University.

“The success of Connection 2006 indicates that all sectors of the industry are committed to meeting the challenges confronting healthcare — managing costs, improving clinical outcomes, and addressing gaps in care,” said Carol Diephuis, executive vice president of Thomson Medstat. “It’s very rewarding to have customers come together to learn from each other and share their successes.”

The Thomson Corporation and Thomson Medstat
The Thomson Corporation (www.thomson.com), with 2005 revenues of $8.70 billion, is a global leader in providing integrated information solutions to business and professional customers. Thomson provides value-added information, software tools and applications to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate e-learning and assessment, scientific research and healthcare. With operational headquarters in Stamford, Conn., Thomson has approximately 40,000 employees and provides services in approximately 130 countries. The Corporation’s common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC). Medstat (www.medstat.com) is a Thomson healthcare business that provides market intelligence and benchmark databases, decision support solutions, and research services for managing the cost and quality of healthcare. Medstat applies these capabilities to improve policy and management decision making for employers, government agencies, health plans, hospitals and provider networks, and pharmaceutical companies.

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David Wilkins

Thomson Medstat

The Thomson Corporation

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