Another largely unanswered question is how valuable pay-for-performance will be in improving patient care, safety, and satisfaction. While most HM contracts include additional compensation based on volume, bonus pay often ignores such measurable outcomes as readmission rates and length of stay.
“Does incentivizing healthcare quality actually improve health?” asks Susan Freeman, MD, chief medical officer at Temple University Hospital in Philadelphia. “It’s really hard to measure things that don’t happen—the myocardial infarction that didn’t happen, the stroke that didn’t happen.”
Active pay-for-performance programs numbered 160 in November 2007, four times the number of programs four years earlier.1 Yet as the concept catches on, the average physician incentive was 2% or less, and it seems to play a small role in how care was delivered.2
A more recent look at the issue concludes that if insurance companies and private employers worked with hospitals and physicians, attitudes toward pay for performance might change. “The amount of incentives available to physicians strongly affected their rate of participation,” say the authors of a May study in the American Journal of Managed Care. “Our analysis suggests that all stakeholders—health plans, physicians, and patients—would benefit from health plans collaborating on their pay-for-performance efforts to maximize physician participation.”3
Russell Holman, MD, FHM, chief operating officer of Cogent Healthcare, says another pay-for-performance concern is that improved quality is not always something that translates quickly into bottom-line savings. In today’s economic environment, in which every dollar spent has to be justified, it can actually be tougher to sell the upfront costs and long-term savings associated with investment in QI projects. “Improving quality is going to take a long time to see the advantages to the healthcare system,” says Dr. Holman, a former SHM president. “It is delayed gratification.”
Is HM Ready?
Dr. Holman says the pay-for-performance solution might end up as more of a hybrid of two reimbursement models, incentive-based pay and the controversial notion of billing bundling. Most hospitalists and HM groups are not entirely comfortable with the bundling idea, in which the hospital receives a lump-sum reimbursement for all services performed for a patient, then shells out payment to the surgeons, hospitalists, nurses, etc. The concept of hospitals as payment intermediaries adds an extra layer of bureaucracy, but the bundling concept appears to be gaining momentum.
While QI projects are the trendy way to measure value, Dr. Chassin points out that physicians need more detailed thresholds to exceed. Such measures as prescribing beta-blockers after myocardial infarction were good first-generation concepts, but better care requires better benchmarks, he says. Dr. Wachter echoes the sentiment, telling HM09 attendees that relying on past successes in QI won’t help hospitalists demonstrate their value or answer the “What have you done for me lately?” demand from hospital administrators.
Dr. Chassin compares healthcare to other high-pressure industries that do much better at controlling mistakes. Some estimates show nearly 100,000 people a year die from medical errors. Why? Many high-risk industries—airlines, nuclear energy, mining—have better quality and safety processes to protect against routine errors that continually plague healthcare (e.g., hospital-acquired infections, operations on the wrong patient).
The responsibility to get better doesn’t belong to one medical group, either. Dr. Chassin says researchers, the Centers for Medicare and Medicaid Services, and trade groups like SHM have to work collaboratively to design benchmarks that can be measured quantitatively. Once those measuring sticks are in place, though, Dr. Chassin believes hospitalists are the first responders who can best identify and solve problems.
“You have to understand the causes of the problems you’re trying to fix,” he says. “Hospitalists are on the front lines.” TH