MINNEAPOLIS—In an attempt to address an estimated $44 billion that U.S. employers lose in productivity a year due to employee depression, Bridges to Excellence this week is launching a pay-for-performance program that will reward physicians for providing optimal treatment of the condition.

The Depression Management Care Link will be tested in Minnesota among providers who treat some 780,000 employees and dependents enrolled in the benefit plans of a subset of employers that belong to Buyers Health Care Action Group, a statewide employer coalition.

"We know that at any given point in time, at least 5% of our employee population is in emotional distress," said Charles Montreuil, who is vp of human resources at Minnetonka, Minn.-based Carlson Cos., chairman of the employer coalition and president of Bridges to Excellence "Many illnesses have depression as a comorbidity."

He based his assessment on an anecdotal review of pharmacy benefit claims, which showed antidepressants among the top three drugs prescribed to Carlson's employees, and a review of the type of employee assistance program services being sought.

However, only a fraction of depressed employees are being diagnosed, he said.

"This program will help facilitate the adoption of the PHQ-9," a patient health questionnaire developed by Pfizer Inc. that testing has shown to accurately diagnose depression most of the time, Mr. Montreuil said.

Under the Minneapolis-based BTE's depression care program, patients will be required to complete the screening questionnaire to determine whether they are depressed. A reassessment will be conducted at six months, and then six months after that. The goal is for patients to have a significant reduction in scores on the PHQ-9 within 12 months.

Plan members will pay the normal copayments required by their plans.

Scoring and assessment of doctor performance will be conducted by MN Community Measurement, a BTE performance assessment organization. High-performing doctors will receive bonus payments of $100 for each patient beginning in 2009 if a majority of the patients they have identified as depressed using the PHQ-9 show improvement.

Initial funding for the depression care pilot program comes from a group of 11 employers called Champions of Change. Aside from Carlson, members include: 3M Co., General Electric Co., Honeywell International Inc., Medtronic Inc., Resource Training & Solutions, Minnesota Department of Employee Relations, Minnesota Department of Human Services, Target Corp., the University of Minnesota and Wells Fargo Bank N.A.

Most of the state's health plans have committed to contributing to the pilot in 2010. In addition, the Minnesota Department of Health Services will participate and incorporate the state's Medicaid population into the program, said Carolyn Pare, chief executive officer of BHCAG.

Although the BTE initiative is believed to be the first pay-for-performance program involving depression in the United States, at least one other employer coalition tried to address the costly condition.

From 2000 to 2005, the Kansas City, Mo.-based Mid-America Coalition on Health Care operated a program that aimed to destigmatize depression among doctors and employees to ensure people in need were getting appropriate treatment. In particular, the program involved educating doctors about coding depression medical claims to ensure they would be reimbursed sufficiently for the extra time and attention needed to achieve that diagnosis. The program used the PHQ-9 as a diagnostic tool.

But the program didn't produce the desired results, said William Bruning, CEO of the coalition.

Even after doctors were told how to diagnose and bill for treatment, "the practice patterns did not change. In fact, the number of claims with a diagnosis of depression actually went down by a fraction of a percent," Mr. Bruning said.

He speculated that the main reason for the failure was that most benefit plans do not provide sufficient coverage for depression treatment, leading many patients to dissuade their doctors from applying that diagnosis.

"I salute them for trying," Mr. Bruning said of the BTE initiative. "But what is really needed to ensure that more people are treated for depression is a value-based benefit plan design."

Francois de Brantes, CEO of BTE, acknowledged that inadequate coverage could be a barrier to treatment for some patients. However, "we have the same issues in treatment of all the chronic illnesses," such as diabetes, and BTE's pay-for-performance programs have achieved positive results despite benefit plan design, he said.

BTE cannot dictate that employers participating in its pay-for-performance initiatives alter their benefit plans to provide better coverage to encourage patient compliance with treatment, he said. BTE does, however, encourage employers to foster consumerism among their employees while urging doctors to do a better job of diagnosis and treatment, he said.

"But if you do one and not the other, you're always going to run into a limiting obstacle," Mr. de Brantes said.