Healthcare's New Revolution: Pay-for-Engagement (P4E) Model Gains Traction with IPO Filing

Nowadays, some internet medical tools provide more efficient ways to facilitate doctor-patient communication and promote patient engagement. Some innovative directions are increasingly focusing on further enhancing patient participation.

This article, titled “Pay-for-Participation,” was authored by Ben Rosner, Kyle Homstead, and Jordan Shlain and published on The Health Care Blog. In China, awareness of this model remains limited due to the absence of supportive policy frameworks. Nevertheless, advanced healthcare models are likely to evolve in a direction that aligns with the goals of cost containment and improved therapeutic outcomes. VCBeat has compiled and translated the key content as follows:

A television may offer a thousand channels, yet you haven’t turned on a single one. “Patient engagement” is similar: although it has increasingly become a buzzword, it is rarely applied in clinical practice. To some extent, this is due to a lack of integration. Until recently, three essential conditions for “patient engagement” were defined: 1. With this clear and actionable definition, we can continuously measure and manage patient engagement just as clinicians do with vital signs; 2. In the patient engagement equation, healthcare providers and patients are the two most critical components, thereby ensuring clinical relevance during consultations; 3. Necessary incentives should be implemented to help physicians promote active patient participation. Below, we will discuss these three elements and present two ongoing experimental studies that are breaking down these barriers.

Figure 1

Figure 2

The term “patient engagement” in Google search andGrey Literature(Figure 1) and the usage volumes cited in review literature (Figure 2) have soared year by year in recent years. However, a major problem persists: although many conceptual definitions have been proposed in the market, there are virtually no practical definitions that can truly help us translate ideas into action. It is akin to lacking a common currency for trade; what it is and what we need to do to advance it are entirely constrained by the definitions of the terms we happen to search for. As Stan Berkow stated in his March 2014 blog post for The Huffington Post, “While everyone has heard of patient engagement, no one really knows what it is or how to measure it.” It is like chasing our own tails, unsure of how to reach the goal or whether we have already arrived.

Why Do We Need a Pragmatic Definition?Growing evidence suggests that patient engagement in their own medical treatment leads to better outcomes and reduced healthcare costs. However, to promote the development of such engagement, we must measure it. Hibbard et al. made a commendable attempt to bridge the gap between research metrics and real-world clinical application by employing the Patient Activation Measure (PAM). An “activated” patient is one who possesses the knowledge, skills, and confidence to effectively manage their own health. PAM scores can predict behaviors; once behavioral change occurs, sustained action is required. Engagement is essentially a dynamic measure of how patients make choices and maintain their course over time. It is not a static measurement or outcome at a single point in time; rather, patient engagement should be regarded as a vital indicator for both patients and all parties involved in healthcare delivery. Just as regular, ongoing blood pressure monitoring yields beneficial health effects, so too does patient engagement.

Why Pay Physicians for Patient Engagement?The concept of pay-for-participation is not new; numerous studies have explored providing financial incentives to members who engage in health-related behaviors. Unfortunately, the results of these studies have been mixed, and it remains unclear whether long-term behavioral change can truly make a difference. Why is this? The answer is simple. For instance, if we were asked to join an organization lacking any trustworthy individuals, would we continue to participate? Engagement is not merely about facilitating the implementation of administrative programs, nor is it simply about getting patients to log onto a website. Rather, it involves obtaining answers to health-related questions through experienced and trusted individuals, such as physicians. This concept is supported by a study on patient engagement led by national healthcare reform initiatives, which clarified that “it is crucial for people to trust their doctors; however, outreach efforts cannot succeed if patients are unfamiliar with the providers.” One reason for this challenge is that responsibility has been delegated to organizations and event organizers rather than the physicians themselves, who lack protected time and effective tools to proactively and consistently engage with patients.

Pay-for-Engagement (P4E)It is a new payment model that combines physician compensation with patient engagement, rooted in the principles of narrative medicine and the maintenance of care-centered relationships. Pay-for-Engagement (P4E) consolidates a strong physician-patient relationship and promotes the generation of patient data, serving as an economic catalyst to drive new, longitudinal medical practices. Under the P4E model, physicians are directly compensated based on the time, effort, and level of care provided during patient engagement, which includes proactive communication, post-discharge monitoring, analysis, and interventions beyond traditional clinical visits.

In this model, compensation takes the form of installment payments based on recovery periods tied to activity duration, or multiple payments for chronic disease management. In both cases, the emphasis is on maintaining a solid doctor-patient relationship rather than pursuing indefinite metrics. The P4E model highlights the critical role of patient engagement in the doctor-patient dynamic, encouraging communication and expanded collaboration outside clinical settings, as well as long-term daily attention.

The Impact of Proactive Communication
As Laura Landro described in The Wall Street Journal, communication between physicians and patients is regarded as a “soft” science, yet it is increasingly understood that deficiencies in this area essentially constitute medical failures and drive up costs. Problems in physician-patient communication are more often attributable to negligence. Research conducted by the University of Texas and the University of California shows that impaired physician-patient communication carries a 19% higher risk compared with satisfactory interactions. Communication centered on patient engagement occupies a core position within treatment-focused frameworks; “high-quality physician-patient relationships are critically important to healthcare delivery and the broader healthcare system.”

Pay-for-participation is designed to directly compensate physicians for maintaining patient-physician relationships, particularly for activities beyond traditional clinical engagement.

Patient Engagement and Physician Engagement

While the focus has consistently been on patient engagement, physician engagement cannot be overlooked. On the front lines of the U.S. healthcare system, physicians bear the brunt of overseeing medical issues, medical technologies, and payment reforms. As representatives of the healthcare system, physicians often become targets of frustration and anger, creating a subtle yet challenging atmosphere that significantly impacts the quality of care they provide, their work efficiency, and other critical aspects of their practice.

In this challenging context, how can we incentivize physicians to take additional measures for an increasing number of patients? With the emergence and proliferation of secure electronic messaging, physicians are increasingly responsible for managing a large volume of electronic information without additional compensation. In one study, more than 75% of physicians stated that lack of compensation was a barrier to participating in patient safety messaging. A 2003 policy paper from the American College of Physicians noted that “the American Psychiatric Association analyzed and recommended that physician compensation be structured for online services to ensure fairness,” urging the Centers for Medicare & Medicaid Services (CMS) to reimburse physicians for e-health communications delivered via email or consultation. Former CMS Administrator Donald Berwick pointed out that “communication between physicians and patients can be facilitated through easier, multi-channel interactions, enabling access to be supported in more ways rather than relying solely on the single best method.” Gradually, CMS has added billing codes to make reimbursement for telehealth possible, but there is still a long way to go. Crotty et al., in their recent article in Health Affairs, stated that “as the use of secure messaging becomes increasingly common, mechanisms for compensating physicians and quantifying the workload associated with electronic information will become more important.” Crotty further indicated that most taxpayers continue to usePay-per-UseThe fee-for-service model does not compensate for time spent contacting patients via email, and pessimists predict that this is unlikely to change in the foreseeable future. The capitation payment model faces significant challenges.

By focusing on a key activity with financial incentives and bringing together physicians, patients, and payers. Pay-for-Engagement (P4E) requires proactive participation, whereas fee-for-service is based on treatment outcomes. P4E also differs fundamentally from pay-for-performance; other physician compensation models direct downstream processes toward treatment measures, efficiency standards, and quality metrics. Although P4E deviates from traditional compensation models, it is not mutually exclusive and can be integrated into nearly any framework. Therefore, P4E can complement popular incentive mechanisms, such as the Patient-Centered Medical Home and Accountable Care Organizations.
organizations, ACOs), all of which emphasize coordination and a patient-centered philosophy centered on shared cases.

Health Data in Our Era
If we expect physicians to respond positively to participation in payment models, we should likewise ensure that the forms of participation are both beneficial to patients and effective for physicians. Biomedical sensors, mobile health applications, and Bluetooth devices are rapidly converging with one another and establishing an interoperable framework with clinical systems. Apple’s HealthKit is the latest entrant in this field. There are numerous patient-related data streams of potential interest to physicians, but physicians cannot claim ownership of them. Therefore, physicians typically need to obtain authorization from patients. Calls for engagement are ubiquitous, yet such authorization is sometimes lacking in clinical settings.

In this era of patient-generated health data, the increased opportunities for contact and communication also bring subtle risks. Valuable insights hidden within vast amounts of data are akin to finding a needle in a haystack. Ultimately, if we are to leverage technology, SMS, secure messaging, and sensor devices to enable patients to track and share their health data, we must provide care teams with filtered, meaningful, and actionable information. By utilizing patient-reported outcomes, such as subjective metrics currently being developed within systems, and objective data interpreted through intelligent algorithms, we can reduce physicians’ workload, ensure data validity and actionability, and thereby enhance physician engagement.

Combine them together

Returning to our starting point, achieving engagement requires approximately the following: establishing a practical definition of engagement, providing appropriate stakeholders (physicians and patients) with the right tools (convenient, effective, and actionable), enabling them to adhere to relevant care and health management plans, and offering incentives to sustain ongoing engagement.

We can cite examples to illustrate whether the pay-for-participation model is working. In California, two large-scale national payment experiments are currently underway, in which medical malpractice liability insurers are paying plastic surgeons who successfully maintain patients’ surgical care outcomes. Although the results of these trials will not be known for another one to two years, improved treatment outcomes and lower costs are the most anticipated benefits. Of course, the findings from these studies may have significant cross-specialty implications for other medical disciplines.

In these experimental studies, patients participated in specific e-therapy programs automatically scheduled by electronic systems. These automated check-in requests originated directly from the patients’ physicians, leveraging established trust relationships and incorporating reminders, guidance, and care instructions consented to by both parties. Such tasks might include addressing gaps in care, providing guidance on medication adjustments, facilitating recovery after assisted surgery, and sending reminders for post-discharge arrangements. The focus of all these activities is to achieve optimal postoperative outcomes through thorough preoperative preparation. This approach goes beyond merely educating patients on what to watch for; it enables actionable interventions by providing timely clinical behavioral reminders. Following surgical discharge, the automated, continuous e-check-in program may include encouraging messages, guidance, and assessments that monitor clinical symptoms through verification.

(1) Participation in Implementation: Engage in a meaningful activity schedule mutually agreed upon by both parties, with participation limited to those activities that are pre-scheduled. In these experimental studies, a patient who proactively engages in activities beyond the predetermined items will enhance his or her level of participation. This approach can achieve a high degree of engagement, particularly among individuals aged 65 to 75 years.

(2) Making Participation Clinically Compatible and Meaningful: Through automation, physicians can asynchronously manage a larger patient load simultaneously. By leveraging analytical algorithms, patient concerns—often akin to “finding a needle in a haystack”—are triaged to healthcare providers or physicians, ensuring that these patients receive reassurance comparable to that provided to the majority of other patients.

(3) Creating Incentives: Actual reimbursement will be based on metrics of physicians’ actual engagement with patients, particularly for those who develop clinical concerns requiring attention. Treat passive participation as a significant red flag and proactively reach out to these patients. By conducting careful inquiries during visits, their concerns can be addressed earlier than before.

Many companies, including HealthLoop, Wellbe, Ginger.IO, Conversa, and RoundingWell (to name just a few), are entering the digital space to enable asynchronous access and connect patients and physicians in increasingly meaningful ways. P4E, co-developed by Dr. Jordan Shlain, founder of HealthLoop, is a novel and powerful approach to engaging patients in clinical care. As meaningful digital metrics for engagement emerge and the recognition of escalating risks grows, engaged patients will achieve better outcomes at lower costs. Patients, physicians, and payers may find their interests increasingly aligned. When this happens, we may finally turn the tide and make a breakthrough.

(To stay updated on the latest information about internet healthcare startups, please follow VCBeat’s WeChat official account: vcbeat. We also welcome you to engage with us on topics of interest, contact us via WeChat, and share your startup projects or relevant research insights.)