Medical Device Daily Washington Editor

WASHINGTON – It seems unlikely that everyone bearing the title of CEO for a hospital chain is named Thomas – of that famed family of frequent skeptics – but when it comes to pay-for-performance (P4P), a great many of them probably have been doubters.

But the annual stream of data from the P4P pilot that the Centers for Medicare & Medicaid Services is financing might just be enough to convince many of these skeptics. At least that was one of the hoped-for outcomes of a panel discussion on the subject yesterday held at the National Press Club (Washington).

Mark Wynn, tdirector of the Division of Payment Policy Demonstration at CMS, described the hospital P4P pilot looking at best practices in five disease categories as “an extremely successful demonstration so far.”

Wynn alluded to the possibility that the Premier project harvested the proverbial low-hanging fruit. “I think you could make a good case you could do more to improve quality across the country and pay them to do more to improve their quality” than to boost incentives for hospitals “that are already at the 97th percentile,” he said.

“We’ve learned a number of lessons already,” Wynn said, including that P4P “works” — and that “relatively small dollars can have big impacts.” These effects, he said, were sustained over the duration of the pilot.

Rick Norling, president/CEO of Premier (Charlotte, North Carolina), the hospital consortium hired to handle the P4P pilot, said transparency was important to the demonstration, along with “the hospital’s innate desire to improve.” The expectation of future public reporting in the future, he said, could drive a parallel improvement in hospitals that didin’t participate in the program.

Norling asked rhetorically, “Was this [a case of] the good just getting better?”

He answered by saying that the data indicate that the gap between the bottom performers narrowed even as the top performers did better, which he described as “a significant finding.”

Regarding expected skepticism, Norling said, “Here comes the ‘so what?’” suggesting that he was prepared for it in discussing the data from the first three years.

“What we found [for coronary artery bypass grafting] is that there is a consistent and strong association between reliably doing” best practices and “less death.” The data he offered for support indicated that in-hospital mortality for this procedure dropped from almost 6% to less than 2% when process measures were met 75% of the time or better, vs. less than 50% of the time at the baseline.

“The data don’t work for just Medicare” patients, he said, the numbers also indicating that all payers’ patients showed similar gains.

“These bundles of processes ... when executed consistently, improve care,” Norling said, and that there was a discernible trend toward lower costs as mortality fell. “When we put it all together, the average improvement per patient, per admission, was about $1,000” across all five disease categories studied in the Premier project.

“Let’s just say that had the entire country participated, we’d save $4.5 billion, and 70,000 lives would be saved,” he said, the latter figure representing a 30% reduction in mortality.

“We think that’s a pretty good ‘so what,’” Norling asserted.

Leadership for the project is especially important, according to Norling, one of the “really key indicators” being a management team “that spends at least 25% of its time” focused on quality of care.

It doesn’t hurt when hospital executives “interact heavily with the medical staff,” Norling said, and, as a behavioral psychologist might have assumed, a benefit is seen when “senior executive compensation is tied to performance.”

Norling said that the CEO is “the key player” since the attitude of the incumbent in the corner office has the greatest impact on the adoption of higher standards of care.

Nick Turkal, MD, president/CEO of Aurora Health Care (Milwaukee), said Aurora, which participated in the Premier project, serves about 3 million patients and has more than 100,000 hospital admissions a year.

He said that there has been “a culture of quality improvement for many years” at Aurora, and that this culture “has changed to the pursuit of perfection.”

“To get people to change the way they work is a big deal,” Turkal said, but to keep this foremost in the minds of 27,000 employees, management distributed boxes of those widely-used rubber wristbands “to remind them of our No. 1 priority.”

“This whole project is really about a knowledge transfer” of best practices, Turkal said, but “a 60-day action plan” was also “extraordinarily important in making these changes.” Aurora was below the average for hospitals that signed on for the Medicare P4P pilot in 2003, but is now at about the top 20% of all participants.

Turkal acknowledged that investment in information technology (IT) “is critically important” for the success of P4P, partly because it allows the hospital to prompt the physician when his/her practices deviate from best practices.

Still, the sticking point for many hospitals might be that many would have to bolster IT spending by a hefty sum in order to generate the data needed to participate, forming a dollars-and-sense roadblock that is hard to ignore.

Another panelist, Mark Povroznik, chairman of infection control at United Hospital Center (Clarksburg, West Virginia), essentially made this case, saying that the payment made for better care “is nowhere near” the cost of IT infrastructure needed to pull off P4P for some hospitals because the cost of these systems “is in the millions of dollars.”

Norling told Medical Device Daily that he sees a shift in the attitudes of hospital CEOs concerning PFP.

“This was a pretty risky thing” in 2003, he said. Many CEOs “were really interested but didn’t feel they had the infrastructure” or they were concerned that the improvements would cost too much to make the proposition viable.

But the yearly reports from Premier are having an effect on the perception of viability of improved quality of care, even when a business case has to be made.

Norling said that optimism “is spreading — I think the look at it now is very different from the look in 2002 and 2003.”