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Medicare News
Controversy Develops Over Medicare’s
Pay-for-Performance to Hospitals
CMS says improvement ‘substantial,’ study call it
‘modest’
 January 29, 2007 – A news release hailing the
success of a two-year project to pay hospitals a bonus for better
performance was issued by the Centers for Medicare & Medicaid Services
last week, but others looking at the results are not so sure of its
success. CMS said it was “substantial improvement” but an independent
study calls the results “Modest,” despite the $8.7 million paid out.
 Pay-for-Performance Program Spurs 'Modest' Improvements, Study Finds
A Medicare pay-for-performance pilot project that
rewards hospitals based on quality measures contributes to "modest"
improvements in quality of care, according to a study published online
Friday in the New England Journal of Medicine, the Wall Street Journal
reports (Tomsho, Wall Street Journal, 1/29).
The project, which launched in October 2003,
includes about 260 hospitals in 38 states.
Under the program, hospitals can earn bonuses if
they rank among the top 20% in providing specified treatments in at
least one of five areas of patient care:
● joint replacement,
● coronary artery bypass graft,
● heart attack,
● heart failure and
● pneumonia.
CMS
officials on Friday announced that the three-year pay-for-performance
pilot program has improved patient care. CMS officials on Friday also
announced that performance bonuses of $8.7 million will be awarded to
115 hospitals that were the top performers based on 30 quality measures
in the second year of the project. (See sidebar)
Premier,
a not-for-profit hospital alliance, is managing the program (Kaiser
Daily Health Policy Report, 1/25). For the NEJM study,
researchers compared results over a two-year period from 207 hospitals
taking part in the CMS project with 406 hospitals that were not offered
quality-care reimbursements.
Both groups of hospitals were participating in
efforts to publicize quality-of-care data. The study found that
hospitals in the pay-for-performance program had greater improvement
overall in all combined measures of quality.
Researchers found that hospitals involved in the
pay-for-performance program had a 2.6% improvement in treatment for
heart attack patients and a 3.4% improvement in care for pneumonia
patients compared with hospitals not in the program (Wall Street
Journal, 1/29). The bonuses were relatively small, accounting for 1% to
2% of the cost of providing care for patients with one of the evaluated
conditions.
Unanswered Questions
According to researchers, a possible problem with the quality
reimbursements was that they were awarded to hospitals relative to the
performance of other hospitals. As a result, "most of the payments went
to hospitals that showed the least improvement but had already begun the
program with higher quality scores,"
HealthDay/Washington
Post reports.
In addition, lead study author Peter Lindenauer --
from the
Division of
Healthcare Quality at Baystate Medical Center and the
Tufts University
School of Medicine -- said that it is not clear whether the
increased costs associated with the program compared with standard
public reporting programs are justified by the small improvements in
patient care.
Lindenauer also said that paying hospitals for
improvement in care for a limited number of conditions could be
problematic, adding, "We don't know whether care for other conditions
could have suffered as a result of hospitals paying less attention to
those conditions, to excel in the areas under study" (Reinberg,
HealthDay/Washington Post, 1/27).
Arnold Epstein, a professor of health policy and
management at the
Harvard School of
Public Health, in an accompanying editorial wrote that "the
findings still leave us with many uncertainties concerning the level of
financial incentives needed and the optimal formula for payment that
might be used for attaining high levels of performance."
Epstein added that "rather than adopt a single new
payment system for all of Medicare, a series of regional models could
accelerate learning and allow Medicare officials to find out more about
the effect of differing levels of incentives and formulas for payments"
(CQ HealthBeat, 1/26).
>> An abstract on the study is available
online.
An abstract of the editorial is available
online.
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