Tip of the Week: In Pay-For-Performance, Make Sure the Right Indicators Are Used


This Tip of the Week focuses on a study to evaluate pharmacy in the context of true patient outcomes, rather than on the structure and process measures often employed in such ratings programs.

There is growing emphasis on measuring performance quality in health care, and this is more thoroughly making its way into pharmacy. There are a number of performance ratings systems, such as the CMS Star Ratings program, and various indicators within each of those programs.

This Tip of the Week focuses on a study conducted in North Carolina to evaluate pharmacy in the context of true patient outcomes, rather than on the structure and process measures often employed in such ratings programs.

In the Journal of Managed Care & Specialty Pharmacy, Urick et al detail the lessons learned from attempting to evaluate these outcomes from a group of pharmacies providing advanced services. The participating pharmacies were part of a community pharmacy enhanced services network (CPESN) in a demonstration project that could loosely be called a practice-based research network (PBRN) for providing comprehensive medication therapy management (MTM). The project examined adherence (through proportion of days covered) for oral diabetes medications, statins, and renin-angiotensin system antagonists, along with per member per month (PMPM) to yield a cost of medical care score, hospitalization score, and emergency department (ED) score. It compared the CPESN pharmacies’ performance with those of other pharmacies in North Carolina.

The measures were combined into a single, 11-point composite pharmacy performance score. Adherence measure scores for enhanced services pharmacies exceeded those of other pharmacies, but total scores were not significantly different unless accounting for case-mix. In other words, the outcomes approached significance when there was an adjustment for how well the CPESN pharmacies were serving a less healthy population.

The program provides an example of a composite performance measurement system that can be used to support alternative pharmacy payment models, and shows that case-mix adjustment is possible (and necessary) for broad outcomes such as those used in this program. As pharmacy payment models evolve, there may be value in collaboration between academics, pharmacists, and payers to bring different areas of expertise and perspectives into the performance measurement process.

The lessons to be gleaned here are many and include, but are not limited to: enhanced pharmacy services can help improve patient adherence to medication, improved medication adherence will not always lead to better health outcomes, particularly in the short-run, and pharmacies need to be highly involved and politically active in discussions about pay-for-performance systems. Thus, pharmacies are making sure to include such parameters as case-mix while being cautious regarding incentives or penalties for outcomes measures, over which they might have limited control.

Additional information about medication therapy management and management functions can be found in Pharmacy Management: Essentials for All Practice Settings, 5e. You or your institution can subscribe to AccessPharmacy to access the textbook.

Shane P. Desselle, RPh, PhD, FAPhA, is Professor of Social/Behavioral Pharmacy at Touro University California. He is author of Chapter 1: The “Management” in Medication Therapy Management and Management Functions in the textbook Pharmacy Management: Essentials for All Practice Settings, 5e.


Urick BY, Ferreri SP, Shasky C, et al. Lessons learned from using global outcomes measures to assess community pharmacy performance. J Manag Care Spec Pharm. 2018;24:1278-1283.

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