Of particular interest is the fact that CMS will allow participating hospitals to set the indicators to be measured. “What they’re asking for are proposals from the hospitals as to what they’ll explore—basing the program on whatever quality indicators the hospital can [use to] measure and demonstrate cost savings,” says Dr. Torcson. “CMS is providing no details regarding specific performance measures.”
Organizations eligible for the PHCD include physician groups, integrated delivery systems (IDSs), and regional coalitions of physician groups. A hospital may be included if it has an affiliation agreement with an eligible physician group. CMS has stated that preference will be given to projects developed and implemented by a consortium of physician groups and their affiliated hospitals. No more than 72 hospitals across all projects will be included in the demonstration.
“This raises the bar that any physician group has to be pretty far along already in measuring quality indicators and performance reporting,” says Dr. Torcson. “It will take a lot of infrastructure to report, measure, [and so on]. I’ll be very impressed with any group that is that far along with performance measurement and reporting. I hope a hospitalist group can be among those that step up and apply.”
Dr. Torcson believes that, while CMS did not specify hospitalists, a hospital medicine group would be uniquely positioned to participate. “Hospitalists are perfect for this,” he emphasizes.
Premier Hospital Demo: Mission Accomplished!
CMS’ first pay-for-performance demonstration program is complete. The Premier Hospital Quality Incentive Demonstration officially ended in September. CMS partnered with Premier, Inc., a nationwide alliance of not-for-profit hospitals, for the three-year demo. At the end of each of the three years, CMS rewarded the top-performing hospitals with cash bonuses. Performance was based on 33 evidence-based quality measures for inpatients with heart attack, heart failure, pneumonia, coronary artery bypass graft, and hip and knee replacements. (The individual measures were compiled into an overall quality score for each clinical condition.)
“I wish all our projects went this well,” said Mark Wynn, director of the Division of Payment Policy Demonstrations, CMS. “We’re absolutely delighted. This program shows the efficacy [of] using pay-for-performance in hospitals.”
According to analysis from Premier, Inc., if every patient in the country with pneumonia, heart bypass, acute myocardial infarction, and hip and knee replacement in 2004 had received most or all (76% to 100%) of a set of widely accepted care processes, it could have resulted in nearly 5,700 fewer deaths, 8,100 fewer complications, 10,000 fewer readmissions, and 750,000 fewer days in the hospital. In addition, hospital costs could have been as much as $1.35 billion lower.
What’s next? Wynn says that CMS is “actively looking at lessons we can use” as the agency prepares a report to be presented to Congress in 2007. “We’ll make a specific recommendation regarding pay-for-performance.”