Evaluation of financial incentives as a quality improvement strategy in the public hospital context : clinician attitudes, design variables, and economic costs

In 2008, a three-year pilot ‘pay for performance’ (P4P) program, known as ‘Clinical Practice Improvement Payment’ (CPIP) was introduced into Queensland Health (QHealth). QHealth is a large public health sector provider of acute, community, and public health services in Queensland, Australia. The organisation has recently embarked on a significant reform agenda including a review of existing funding arrangements (Duckett et al., 2008). Partly in response to this reform agenda, a casemix funding model has been implemented to reconnect health care funding with outcomes. CPIP was conceptualised as a performance-based scheme that rewarded quality with financial incentives. This is the first time such a scheme has been implemented into the public health sector in Australia with a focus on rewarding quality, and it is unique in that it has a large state-wide focus and includes 15 Districts. CPIP initially targeted five acute and community clinical areas including Mental Health, Discharge Medication, Emergency Department, Chronic Obstructive Pulmonary Disease, and Stroke. The CPIP scheme was designed around key concepts including the identification of clinical indicators that met the set criteria of: high disease burden, a well defined single diagnostic group or intervention, significant variations in clinical outcomes and/or practices, a good evidence, and clinician control and support (Ward, Daniels, Walker & Duckett, 2007). This evaluative research targeted Phase One of implementation of the CPIP scheme from January 2008 to March 2009. A formative evaluation utilising a mixed methodology and complementarity analysis was undertaken. The research involved three research questions and aimed to determine the knowledge, understanding, and attitudes of clinicians; identify improvements to the design, administration, and monitoring of CPIP; and determine the financial and economic costs of the scheme. Three key studies were undertaken to ascertain responses to the key research questions. Firstly, a survey of clinicians was undertaken to examine levels of knowledge and understanding and their attitudes to the scheme. Secondly, the study sought to apply Statistical Process Control (SPC) to the process indicators to assess if this enhanced the scheme and a third study examined a simple economic cost analysis. The CPIP Survey of clinicians elicited 192 clinician respondents. Over 70% of these respondents were supportive of the continuation of the CPIP scheme. This finding was also supported by the results of a quantitative altitude survey that identified positive attitudes in 6 of the 7 domains-including impact, awareness and understanding and clinical relevance, all being scored positive across the combined respondent group. SPC as a trending tool may play an important role in the early identification of indicator weakness for the CPIP scheme. This evaluative research study supports a previously identified need in the literature for a phased introduction of Pay for Performance (P4P) type programs. It further highlights the value of undertaking a formal risk assessment of clinician, management, and systemic levels of literacy and competency with measurement and monitoring of quality prior to a phased implementation. This phasing can then be guided by a P4P Design Variable Matrix which provides a selection of program design options such as indicator target and payment mechanisms. It became evident that a clear process is required to standardise how clinical indicators evolve over time and direct movement towards more rigorous ‘pay for performance’ targets and the development of an optimal funding model. Use of this matrix will enable the scheme to mature and build the literacy and competency of clinicians and the organisation as implementation progresses. Furthermore, the research identified that CPIP created a spotlight on clinical indicators and incentive payments of over five million from a potential ten million was secured across the five clinical areas in the first 15 months of the scheme. This indicates that quality was rewarded in the new QHealth funding model, and despite issues being identified with the payment mechanism, funding was distributed. The economic model used identified a relative low cost of reporting (under $8,000) as opposed to funds secured of over $300,000 for mental health as an example. Movement to a full cost effectiveness study of CPIP is supported. Overall the introduction of the CPIP scheme into QHealth has been a positive and effective strategy for engaging clinicians in quality and has been the catalyst for the identification and monitoring of valuable clinical process indicators. This research has highlighted that clinicians are supportive of the scheme in general; however, there are some significant risks that include the functioning of the CPIP payment mechanism. Given clinician support for the use of a pay–for-performance methodology in QHealth, the CPIP scheme has the potential to be a powerful addition to a multi-faceted suite of quality improvement initiatives within QHealth.

Submission to Victorian Parliamentary Committee on Economic Development and Infrastructure

In the networked information driven world that we now inhabit the ability to access and reuse information, data and culture is a key ingredient to social, economic and cultural innovation. As government holds enormous amounts of publicly funded material that can be released to the public without breaching the law it should move to implement policies that will allow better access to and reuse of that information, knowledge and culture. The Queensland Government Information Licensing Framework (GILF) Project4 is one of the first projects in the world to systemically approach this issue and should be consulted as a best practice model.

An entrepreneurial model of economic and environmental co-evolution

A basic tenet of ecological economics is that economic growth and development are ultimately constrained by environmental carrying capacities. It is from this basis that notions of a sustainable economy and of sustainable economic development emerge to undergird the “standard model” of ecological economics. However, the belief in “hard” environmental constraints may be obscuring the important role of the entrepreneur in the co-evolution of economic and environmental relations, and hence limiting or distorting the analytic focus of ecological economics and the range of policy options that are considered for sustainable economic development. This paper outlines a co-evolutionary model of the dynamics of economic and ecological systems as connected by entrepreneurial behaviour. We then discuss some of the key analytic and policy implications.

Soil carbon sequestration rates and associated economic costs for farming systems of south-eastern Australia

Soil organic carbon (C) sequestration rates based on the Intergovernmental Panel for Climate Change (IPCC) methodology were combined with local economic data to simulate the economic potential for C sequestration in response to conservation tillage in the six agro-ecological zones within the Southern Region of the Australian grains industry. The net C sequestration rate over 20 years for the Southern Region (which includes discounting for associated greenhouse gases) is estimated to be 3.6 or 6.3 Mg C/ha after converting to either minimum or no-tillage practices, respectively, with no-till practices estimated to return 75% more carbon on average than minimum tillage. The highest net gains in C per ha are realised when converting from conventional to no-tillage practices in the high-activity clay soils of the High Rainfall and Wimmera agro-ecological zones. On the basis of total area available for change, the Slopes agro-ecological zone offers the highest net returns, potentially sequestering an additional 7.1 Mt C under no-tillage scenario over 20 years. The economic analysis was summarised as C supply curves for each of the 6 zones expressing the total additional C accumulated over 20 years for a price per t C sequestered ranging from zero to AU$200. For a price of $50/Mg C, a total of 427 000 Mg C would be sequestered over 20 years across the Southern Region, <5% of the simulated C sequestration potential of 9.1 Mt for the region. The Wimmera and Mid-North offer the largest gains in C under minimum tillage over 20 years of all zones for all C prices. For the no-tillage scenario, for a price of $50/Mg C, 1.74 Mt C would be sequestered over 20 years across the Southern Region, <10% of the simulated C sequestration potential of 18.6 Mt for the region over 20 years. The Slopes agro-ecological zone offers the best return in C over 20 years under no-tillage for all C prices. The Mallee offers the least return for both minimum and no-tillage scenarios. At a price of $200/Mg C, the transition from conventional tillage to minimum or no-tillage practices will only realise 19% and 33%, respectively, of the total biogeochemical sequestration potential of crop and pasture systems of the Southern Region over a 20-year period.

A test vehicle for compliance with resilience requirements in index-based e-health systems

Increasingly, national and international governments have a strong mandate to develop national e-health systems to enable delivery of much-needed healthcare services. Research is, therefore, needed into appropriate security and reliance structures for the development of health information systems which must be compliant with governmental and alike obligations. The protection of e-health information security is critical to the successful implementation of any e-health initiative. To address this, this paper proposes a security architecture for index-based e-health environments, according to the broad outline of Australia’s National E-health Strategy and National E-health Transition Authority (NEHTA)’s Connectivity Architecture. This proposal, however, could be equally applied to any distributed, index-based health information system involving referencing to disparate health information systems. The practicality of the proposed security architecture is supported through an experimental demonstration. This successful prototype completion demonstrates the comprehensibility of the proposed architecture, and the clarity and feasibility of system specifications, in enabling ready development of such a system. This test vehicle has also indicated a number of parameters that need to be considered in any national indexed-based e-health system design with reasonable levels of system security. This paper has identified the need for evaluation of the levels of education, training, and expertise required to create such a system.

Use of virtual index for measuring efficiency of innovation systems : a cross-country study

In this study we propose a virtual index for measuring the relative innovativeness of countries. Using a multistage virtual benchmarking process, the best and rational benchmark is extracted for inefficient ISs. Furthermore, Tobit and Ordinary Least Squares (OLS) regression models are used to investigate the likelihood of changes in inefficiencies by investigating country-specific factors. The empirical results relating to the virtual benchmarking process suggest that the OLS regression model would better explain changes in the performance of innovation- inefficient countries.

Economic development, enlightenment and creative transformation : creative industries in the New China

This paper examines some of the implications for China of the creative industries agenda as drawn by some recent commentators. The creative industries have been seen by many commentators as essential if China is to move from an imitative low-value economy to an innovative high value one. Some suggest that this trajectory is impossible without a full transition to liberal capitalism and democracy - not just removing censorship but instituting 'enlightenment values'. Others suggest that the development of the creative industries themselves will promote social and political change. The paper suggests that the creative industries takes certain elements of a prior cultural industries concept and links it to a new kind of economic development agenda. Though this agenda presents problems for the Chinese government it does not in itself imply the kind of radical democratic political change with which these commentators associate it. In the form in which the creative industries are presented – as part of an informational economy rather than as a cultural politics – it can be accommodated by a Chinese regime doing ‘business as usual’.

Tea ceremony and Sukiya : negating social hierarchy

There is a widely held view that architecture is very strongly and even primarily determined by the society and culture rather than geographical, technical, economic or cli-matic factors. This is especially evident in societies where rituals, customs and tradition play a significant role in the design of built forms. One such society was that of Feudal Japan under the rule of samurai warriors. The strictly controlled hierarchical society of Feudal Japan, isolated from the rest of the world for over 250 years, was able to develop the art and architecture borrowed from neighboring older cultures of China and Korea into what is now considered uniquely Japanese. One such architecture is the Sukiya style tea houses where the ritual of tea ceremony took place. This ritual was developed by the tea masters who were Zen monks or the merchants who belonged to the lowest class in the hierarchical feudal society. The Sukiya style developed from 14th to 16th century and became an architectural space that negated all the rules imposed on commoners by the samurai rulers. The tea culture had a major influence on Japanese architecture, the concept of space and aesthetics. It extended into the design of Japanese gardens, clothes, presentation of food, and their manners in day to day life. The focus of this paper is the Japanese ritual of tea ceremony, the architecture of the tea house it inspired, the society responsible for its creation and the culture that promoted its popularity and its continuation into the 21st century.

Productivity, Technical and Efficiency Change in Singapore’s Services Sector, 2005 to 2008

The current study was motivated by statements made by the Economic Strategies Committee that Singapore’s recent productivity levels in services were well below countries such as the US, Japan and Hong Kong. Massive employment of foreign workers was cited as the reason for poor productivity levels. To shed more light on Singapore’s falling productivity, a nonparametric Malmquist productivity index was employed which provides measures of productivity change, technical change and efficiency change. The findings reveal that growth in total factor productivity was attributed to technical change with no improvement in efficiency change. Such results suggest that gains from TFP were input-driven rather than from a ‘best-practice’ approach such as improvements in operations or better resource allocation.

Endogenous mortality, human capital and economic growth

We consider growth and welfare effects of lifetime-uncertainty in an economy with human capital-led endogenous growth. We argue that lifetime uncertainty reduces private incentives to invest in both physical and human capital. Using an overlapping generations framework with finite-lived households we analyze the relevance of government expenditure on health and education to counter such growth-reducing forces. We focus on three different models that differ with respect to the mode of financing of education: (i) both private and public spending, (ii) only public spending, and (iii) only private spending. Results show that models (i) and (iii) outperform model (ii) with respect to long-term growth rates of per capita income, welfare levels and other important macroeconomic indicators. Theoretical predictions of model rankings for these macroeconomic indicators are also supported by observed stylized facts.

Unbiased estimation of the half-life to price index convergence among U.S. cities

Estimates of the half-life to convergence of prices across a panel of cities are subject to bias from three potential sources: inappropriate cross-sectional aggregation of heterogeneous coefficients, presence of lagged dependent variables in a model with individual fixed effects, and time aggregation of commodity prices. This paper finds no evidence of heterogeneity bias in annual CPI data for 17 U.S. cities from 1918 to 2006, but correcting for the “Nickell bias” and time aggregation bias produces a half-life of 7.5 years, shorter than estimates from previous studies.