Macro-Level Composite Measures: Their Value in a Pay-for-Performance Program
Michael Shwartz, SMG, Boston University
Keywords: composite measures, quality, pay-for-performance
Composite measures, which aggregate performance on individual measures into a summary score, are increasingly being used for provider profiling and in pay-for-performance (P4) programs. Macro-level composite measures combine individual measures or domain-specific scores into an overall composite measure, thereby facilitating benchmarking and monitoring of organizational improvement; and they allow policy makers, managers and researchers to easily identify high and low performing facilities. However, macro-level composite scores have not typically been used for profiling or pay-for-performance. This is problematic because facilities that perform well on macro-level composite measures may not be among the top performers on many of the individual or domain-specific measures comprising the composite, and thus may not be recognized as a top performer when individual measures or domain-specific measures are used for profiling and P4P. We will present both empirical and simulation-based results comparing profiles and P4P rewards when macro-level composites versus composite components are used as the basis for evaluation.