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Study: Medicare Pay for Performance Might Not Work as Currently Designed

From: The eWire, 4.25.2012

Hospitals should focus more on outcomes, incentives to make the model work, researcher says

by Richard Quinn

Hospitalist Ashish Jha, MD, MPH, doesn't want people to take his research on the value of pay-for-performance models the wrong way. Although a new study he worked on found no evidence that the Medicare Premier Hospital Quality Incentive Demonstration (HQID) led to decreased rates of 30-day mortality, he believes the program's structure—not its concept—is at issue.

"It's not that pay for performance doesn't work,” says Dr. Jha, associate professor of health policy and management at Harvard School of Public Health in Boston. "What we had in the HQID was pretty small incentives and mostly focused on processes of care, some of which are important, many of which are not. When you have that as your structure, it's not shocking to see in retrospect that it didn't have a big impact on outcomes."

The report, "The Long-Term Effect of Premier Pay for Performance on Patient Outcomes," showed that the composite 30-day mortality rates for patients with acute myocardial infarction, congestive heart failure, pneumonia, and coronary-artery bypass grafts were similar for Premier and non-Premier hospitals (12.33% and 12.40%, respectively; 95% confidence interval, -0.40 to 0.26).

Dr. Jha says the results were surprising, but he believes that HQID, value-based purchasing, and any pay-for-performance model can only succeed if they more narrowly focus on outcomes. For example, he says, HQID should not have weighed reductions in 30-day mortality rates on par with providing smoking-cessation worksheets to patients at discharge.

"You need much stronger incentives," he says. If hospitals focus on outcomes—and, specifically, on the right outcomes—they will figure out what processes they need to engage in and refine, he says. "Hospitalists are going to be the key people there. If they know that their mortality rates are high, they're going to work on trying to figure out why."

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