“You get what you pay for” is a favorite mantra serving as a corollary to supply-side capitalistic perspectives. But a variety of healthcare metrics could be shown to indicate that the mantra more often than not fails to hold true in U.S. healthcare. What a patient – or an insurer, or the government – pays for in this highly fragmented system doesn’t always translate to the best care.

In an effort to more rationally link the two is the relatively new concept of pay-for-performance (P4P) in the delivery of hospital care, and a white paper report released last month by powerhouse group purchasing organization (GPO) Premier (San Diego/Charlotte, North Carolina) and the Centers for Medicare and Medicaid Services (CMS) indicates that it works. The white paper documents the results of what it terms a “groundbreaking” P4P Hospital Quality Incentive Demonstration (HQID) project and discusses how economic incentives to hospitals appears to have translated to better outcomes for patients.

Specifically, better clinical performance paid off for the hospitals that did the best in this project. CMS awarded $8.85 million in Medicare incentives to the hospitals that were judged as “top performing.”

Key to the study is the targeting of five types of care, three of them in the areas of cardiovascular therapy: treatment of myocardial infarction, treatment of heart failure and treatment of patients who have had a coronary artery bypass grafting (CABG) procedure. The other two areas of care used in the assessment were treatment of community acquired pneumonia and treatment of those with hip and knee replacement procedures.

The white paper described improved performance in following standard protocols (from four in the treatment of heart failure to nine in the treatment of myocardial infarction – a total of 34) by the best-performing hospitals, with the largest improvement seen in therapies delivered for heart failure patients. The protocols used in the three cardiovascular treatment areas are presented in Table 5.

By the numbers

By percentages, the improvements in following these protocols were as follows:

  • from 65% to 74% for patients with heart failure;
  • from 85% to 90% for patients with coronary artery bypass graft;
  • from 87% to 91% for patients with myocardial infarction;
  • from 85% to 90% for patients with hip and knee replacement;
  • from 69% to 74% for patients with community acquired pneumonia.

Perhaps the most striking bit of data in the white paper is that the study reported 235 acute heart attack (myocardial infarction) patients saved “as a result of quality improvements in that related focus area” of the program.

Average improvement across the clinical areas was 6.6%, and the white paper notes that these performance gains “outpaced those of hospitals involved in other national performance initiatives.” It said also: “The range of variance among participating hospitals is also closing, as those hospitals in the lower deciles continue to improve their quality scores and close the gap between themselves and the demonstration’s top performers.”

The pay-outs to hospitals were based on the following formula: Awards were granted to the top 10% in a given clinical area, with an additional 2% bonus on their Medicare payments for patients in that clinical area. Hospitals in the second 10% received a 1% bonus.

A key question

Participation in the study by Premier, an organization that banners its primary value proposition as similar to that of P4P – improved economics for hospitals, raises a key question concerning conflict of interest.

But Hunter Kome, spokesman for Premier, emphasized the transparency of the data used and the minority, but significant, participation by hospitals that are not members of the Premier purchasing group. The methodology used in the study has been posted on Premier’s web cite, he told Cardiovascular Device Update, thus allowing an examination of how the study was pursued.

Altogether, 250 hospitals participated in the demonstration project, with Kome noting the wide distribution of these hospitals from all parts of the country. Specifically, hospitals in 38 states participated.

“Results from the first year show significant improvement in the quality of care in all measured clinical areas,” said Denise Remus, PhD, vice president of Clinical Informatics at Premier, Clinical Informatics being Premier’s lead player in developing the database information.

The project, launched in the fall of 2003, also includes, according to the white paper, “public recognition for top-performing hospitals as well as financial penalties for hospitals that do not improve above a pre-defined quality measure threshold by the third year of the project.” The amount of financial penalties was not described.

Premier said that its relationship with the participating hospitals “enabled implementation of effective, collaborative knowledge transfer programs supporting identification and dissemination of best practices of top performers,” calling this “a key component to the rapid pace of performance improvement.”

“Premier, like the hospitals participating in HQID, is committed to the improvement of clinical quality and patient outcomes and has been so since our inception,” said Richard Norling, president and CEO of Premier. “Consequently, quality and leadership throughout the hospital structure played an integral role in the outstanding clinical performance results of these hospitals.”

Premier’s Healthcare Informatics unit offers performance measurement, benchmarking, and reporting products and related advisory services and methodologies to support health systems’ and hospitals’ quality improvement efforts. Among its products and services, Premier Healthcare Informatics offers the Advisor Suite of clinical and operational performance measurement and reporting solutions; best practice methodologies to directly implement quality improvement programs; project-specific guidance; and on-site expertise to support improvement of clinical outcomes and efficiency of care. Areas of expertise include JCAHO and CMS performance measurement, clinical and operational benchmarking, labor management programs, balanced scorecards, patient satisfaction, evidence-based research, and patient safety.

The top five

The white paper reported that five hospitals performed within the top 20% for all five areas in which they participated in year one. They are:

Hackensack University Medical Center (Hackensack, New Jersey) and McLeod Regional Medical Center (Florence, South Carolina), the top performers in all five areas.

Fairview Lakes Regional Medical Center (Wyoming, Minnesota), placing in the top deciles for the three clinical conditions in which it participated;

Bone and Joint Hospital (Oklahoma City), and Presbyterian Hospital of Allen (Allen, Texas), performing in the top deciles for the one clinical focus area in which they participated.