Pay for Performance Extends to Health Care in Experiment in New York

For a generation, doctors in New York’s economically depressed neighborhoods have been the ugly ducklings of the medical hierarchy. Many are foreign born and foreign trained, serve mostly minority and immigrant patients, and often run high-volume practices to compensate for Medicaid’s low rate of payment.

Now these doctors are in the vanguard of an experiment to transform New York’s health care services for the poor from a disorganized hodgepodge into coordinated networks of doctors, hospitals and other practitioners.

Medicaid officials hope to inspire these providers to work together and take a more active role in looking after their patients’ health, rather than simply waiting for them to show up when ill. The hope is that if they can do a better job of getting patients to, for example, quit smoking or manage their diabetes, doctors could reduce costly visits to hospitals and their emergency rooms.

Versions of this model, commonly called accountable care organizations, are appearing around the country for Medicare recipients, with mixed results. New York, which has the country’s largest Medicaid budget, is committing more than $1 billion a year for five years to the experiment. If it works, more could follow.