Pay for performance…is it working

All hospitals that accept Medicare payment are subject to Value Based Purchasing (VPB) and VPB works by paying hospitals who perform well in certain areas more and hospitals who perform poorly, less.  The VPB reimbursement is determined by performance in HCAHPS or the patient’s perception of care and clinical indicators related to pneumonia, CHF, MI or heart attack and procedures performed during and after surgery.  There are a few other things that tie in but these are the biggies.  The purpose of VPB is to provide incentive for hospitals to follow specific guidelines in hopes that patient outcomes improve.

The theory sounds great and GVMH’s performance in VPB is ahead of the national median so we actually stand to gain financially but the real goal of the program is to improve patient outcomes.  The question that has yet to be answered is – does VPB improve patient outcomes and does the program decrease cost.  There is recent evidence to suggest that patient outcomes are not improved and cost has increased.

Over the past six years 252 hospitals participated in Premier Inc.’s large pay-for performance program, on which Medicare’s current value-based purchasing rules are based, and those hospitals did not have lower 30-day mortality rates compared with 3,363 non-participating hospitals, according to a Harvard-based report.

The study calls into question whether pay-for-performance models that mostly use process measures translate to better outcomes—in this case the reduction of 30-day mortality rates, said Ashish K. Jha, MD, of the Harvard School of Public Health Department of Health Policy and Management, and co-authors.

“These findings are sobering for policymakers who hope to use incentives such as those in Premier HQID to improve patient outcomes, e.g. 30-day mortality,” the authors wrote.

Premier Inc., a purchasing and quality alliance with 2,400 hospital members, ran the six-year program, called the Hospital Quality Incentive Demonstration (HQID), under a contract from the Centers for Medicare & Medicaid Services. It was based on the hospitals’ performance on 33 process measures, such as whether the hospital gave a heart attack patient a fibrinolytic within 30 minutes of arrival, or gave detailed discharge instructions to a heart failure patient.

Over the six years, CMS paid $60 million in incentive payments to 211 of the 242 participating hospitals which begs the question, is pay for performance working and is pay for performance increasing the cost of health care as opposed to lowering cost which was one of the goals.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Executive Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. At GVMH we care for our families, friends and neighbors. We're committed to providing the safest, friendliest and most compassionate care to all we serve.
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