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A Return Visit to Mercy's Pay-For-Performance Program


Within a year of the implementation of a performance-based incentive program for its hospitalists, Mercy Hospital in Springfield, Mass., found itself leading the state in key composite compliance measures. Mercy was No. 2 on the list for two quarters in a row when MassPRO (the federally designated Quality Improvement Organization for Massachusetts) rated all 63 hospitals in the state on performance on quality indicators for heart failure, pneumonia, and MI.

Mercy Hospital ranked second in the state for both the fourth quarter of 2004 and the first quarter of 2005, whereas a different hospital ranked first for each quarter—and Massachusetts is the second-ranked state in the United States in these indicators.

How did Mercy rise so quickly to the top? Win Whitcomb, MD, who heads the hospitalist program at Mercy Hospital, credits the quality-based incentive program he helped initiate. “We had rapid improvement because we had a dedicated group of hospitalists and they were incentivized,” says Dr. Whitcomb.

Pay-for-Performance Program

A full 75% of the inpatients at Mercy Hospital are under the care of 10 hospitalists employed by the Mercy Inpatient Medicine Service (MIMS). As outlined in an article Dr. Whitcomb wrote for the July/August 2005 issue of The Hospitalist (“Physician Pay-for-Performance Comes to the Hospital”), MIMS implemented a unique incentive program for their hospitalists in January 2004.

The pay-for-performance, quality-based incentive program promised that each physician would receive a cash bonus every six months of more than 7.5% of his or her salary—but only if Mercy Medical Center reached the following targets for all hospital patients by the end of 2004:

  1. A 45% rate of pneumococcal vaccine screening and administration for all pneumonia patients;
  2. An 85% rate of documentation of ejection fraction for all heart failure patients; and
  3. Less than 40% rate of ejection fraction for heart failure patients and prescription of an ACE-inhibitor upon discharge (or documentation of a contraindication).

Dr. Whitcomb’s article shows how the MIMS group exceeded each of these quality improvement goals by the end of 2004. The MassPRO ranking shows how well they did in comparison with other hospitals in their state.

“The MassPRO recommendation for our performance is for the whole hospital—not just hospitalists,” says Dr. Whitcomb. “This is a good example of how hospitalists can carry the hospital. We also have traditional PCPs [primary care physicians] who are eager to measure up to our hospitalists; I feed back information to them, too.”

The pay-for-performance, quality-based incentive program promised that each physician would receive a cash bonus every six months of more than 7.5% of his or her salary—but only if Mercy Medical Center reached specific targets.

Update on the Incentive Program

MIMS is not resting on its laurels; they have continued to expand and update the incentive program. According to Bipinchandra Mistry, MD, MRCP, the current leader of the incentive program, 2005 has seen the addition of quality markers for reduction of decubitus ulcer rates, reduction of postoperative urinary tract infections, and discharge instructions for CHF. The annual bonus for physicians will be increased accordingly if these new markers are met.

“Of course, we must also maintain the previous quality markers at the same time,” explains Dr. Mistry.

Dr. Mistry attributes the success of the incentive program to its tie-in with a quality department. “The key is to have a person in your quality department involved to keep an eye on [markers in an incentive program] and see what barriers are coming up,” he says. “Otherwise, it’s harder for a group to forge ahead.”

Of the pay bonus that is tied to the markers, 30% relies on reaching the quality markers. “I think 30% to 40% is a reasonable target,” says Dr. Mistry.

Because these particular measures are difficult for the MIMS hospitalists to monitor alone, a quality improvement group headed by Dr. Whitcomb worked to include both a separate hospitalist group as well as PCPs. All were held accountable for quality through the addition of a “night-time coverage fee” that would be forgiven when the new quality goals were met.

Time will tell if the MIMS pay-for-performance program continues to pay off in increased quality of care for patients. TH

Contributing Writer Jane Jerrard is based in Chicago.

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