Medicare's flagship test of pay-for-performance did not spur more rapid quality improvement among low-performing hospitals

Medicare's flagship hospital pay-for-performance program, the Premier Hospital Quality Incentive Demonstration, began in 2003 but changed its incentive design in late 2006. The goals were to encourage greater quality improvement, particularly among lower-performing hospitals. However, we found no evidence that the change achieved these goals. Although the program changes were intended to provide strong incentives for improvement to the lowest-performing hospitals, we found that in practice the new incentive design resulted in the strongest incentives for hospitals that had already achieved quality performance ratings just above the median for the entire group of participating hospitals. Yet during the course of the program, these hospitals improved no more than others. Our findings raise questions about whether pay-for-performance strategies that reward improvement can generate greater improvement among lower performing providers. They also cast some doubt on the extent to which hospitals respond to the specific structure of economic incentives in pay-for-performance programs.     

美国退伍军人医疗服务系统改革综述与经验分析

20世纪90年代中后期美国最大的公立医疗体系——退伍军人医疗服务系统进行了全面的改革,并在临床服务、患者满意度、运行效率和费用控制等方面迅速达到行业领先水平。通过对文献的综述和分析,本文认为美国退伍军人医疗服务系统改革的成功有两方面原因：宏观方面,组织结构的区域性整合与按人头支付的方式相结合,产生了加强预防保健和提升医疗质量的激励机制;微观方面,以绩效监测为手段改革管理机制．应用了适应临床需求的信息技术系统,服务重点从专科住院治疗快速转为初级保健。文章还讨论了其对我国公立医院改革的启示：公立医院改革的核心是建立责权统一的管理结构,而非产权变革;进一步整合的组织结构与按人头支付的方式相结合,可能创造出维护健康的激励机制;在把握宏观改革方向的基础上,科学的绩效管理方法、信息化技术和初级保健能够为医院发展和医疗卫生服务体系的快速转型发挥巨大的推动作用一     

Medical group responses to global payment: early lessons from the 'Alternative Quality Contract' in Massachusetts

The largest insurer in Massachusetts, Blue Cross Blue Shield, began a new program in 2009 that combines global payments-fixed payments for the care of patient populations during a specified time period-with large potential quality bonuses for medical groups. In interviews with representatives of the participating medical groups, many of which could be considered prototype accountable care organizations, we found that most groups initially focused on two goals: building the infrastructure to help primary care providers earn quality bonuses; and managing referrals to direct patients to lower-cost settings. Groups are working to overcome numerous challenges, which include improving their data management capabilities; managing conflicting incentives in their fee-for-service contracts; and establishing cultures that emphasize teamwork, patient-centered care, and effective stewardship of medical resources. The participating medical groups are diverse in terms of size, organizational structure, and prior experience with managed care contracting. If the groups can succeed in reducing annual growth in health spending by half over the five-year contract, it could signal that even newly formed accountable care organizations can navigate a shift from fee-for-service to population-based payment models.     

Who to pay for performance? The choice of organisational level for hospital performance incentives

Financial incentives for quality improvement in hospital care [known as pay for performance (P4P)] can be directed to either the hospital level or redistributed to the department level. Theoretically, performance payments distributed to lower organisational levels are more effective in increasing performance than payments directed to the hospital level, but the empirical evidence for this expectation is scarce. This paper compares the performance of hospital departments at hospitals that do and do not redistribute performance payments to the department level. We study a Danish P4P scheme to provide patients with case managers. Applying difference in differences analysis, we estimate a 5 percentage points higher performance at hospital departments that are subject to a direct financial incentive. Our results suggest that payers can improve the effectiveness of P4P payments by distributing payments to the department level rather than the hospital level.     

Possibilities and limitations of results-based management, pay-for-performance and the redesign of incentives. 2008 SESPAS Report

The concept of pay-for-performance (P4P) encompasses different strategies that aim to stimulate health care quality improvement by remunerating healthcare providers according to their performance in specific measures of efficiency or quality. Although the effectiveness of P4P in improving quality of care is largely unknown, these systems are being widely adopted in the United Kingdom, the United States and other countries, including Spain. The elements of P4P design that are most decisive for the effectiveness of these schemes are as follows: 1) who should receive the incentives, how they should be paid, what should be rewarded, the need to incorporate risk adjustments (mainly if surrogate outcomes are used as indicators) and the need to bear organizational climate and the optimal combination of financial and non-financial incentives in mind. The most important limitations to consider are the following: 1) the exclusive focus on reducing subutilization; 2) the effect on equity; 3) the "magnifying glass" effect; 4) the validity of indicators; 5) the confusion between the recommendations of clinical guidelines and quality indicators; 6) "document engineering"; 7) paternalism; 8) the negative impact on professionalism and clinicians' internal motivation, and 9) the assumption that quality problems result from imperfect individual decisions rather than from an imperfect system.     

The effect of Phase 2 of the Premier Hospital Quality Incentive Demonstration on incentive payments to hospitals caring for disadvantaged patients

Objective

The Medicare and Premier Inc. Hospital Quality Incentive Demonstration (HQID), a hospital-based pay-for-performance program, changed its incentive design from one rewarding only high performance (Phase 1) to another rewarding high performance, moderate performance, and improvement (Phase 2). We tested whether this design change reduced the gap in incentive payments among hospitals treating patients across the gradient of socioeconomic disadvantage.

Data

To estimate incentive payments in both phases, we used data from the Premier Inc. website and from Medicare Provider Analysis and Review files. We used data from the American Hospital Association Annual Survey and Centers for Medicare and Medicaid Services Impact File to identify hospital characteristics.

Study Design

Hospitals were divided into quartiles based on their Disproportionate Share Index (DSH), from lowest disadvantage (Quartile 1) to highest disadvantage (Quartile 4). In both phases of the HQID, we tested for differences across the DSH quartiles for three outcomes: (1) receipt of any incentive payments; (2) total incentive payments; and (3) incentive payments per discharge. For each of the study outcomes, we performed a hospital-level difference-in-differences analysis to test whether the gap between Quartile 1 and the other quartiles decreased from Phase 1 to Phase 2.

Principal Findings

In Phase 1, there were significant gaps across the DSH quartiles for the receipt of any payment and for payment per discharge. In Phase 2, the gap was not significant for the receipt of any payment, but it remained significant for payment per discharge. For the receipt of any incentive payment, difference-in-difference estimates showed significant reductions in the gap between Quartile 1 and the other quartiles (Quartile 2, 17.5 percentage points [p < .05]; Quartile 3, 18.1 percentage points [p < .01]; Quartile 4, 28.3 percentage points [p < .01]). For payments per discharge, the gap was also significantly reduced between Quartile 1 and the other quartiles (Quartile 2, $14.92 per discharge [p < .10]; Quartile 3, $17.34 per discharge [p < .05]; Quartile 4, $21.31 per discharge [p < .01]). There were no significant reductions in the gap for total payments.

Conclusions

The design change in the HQID reduced the disparity in the receipt of any incentive payment and for incentive payments per discharge between hospitals caring for the most and least socioeconomically disadvantaged patient populations.     

Designing an Effective Pay-for-performance System in the Korean National Health Insurance

The challenge facing the Korean National Health Insurance includes what to spend money on in order to elevate the ''value for money.'' This article reviewed the changing issues associated with quality of care in the Korean health insurance system and envisioned a picture of an effective pay-for-performance (P4P) system in Korea taking into consideration quality of care and P4P systems in other countries. A review was made of existing systematic reviews and a recent Organization for Economic Cooperation and Development survey. An effective P4P in Korea was envisioned as containing three features: measures, basis for reward, and reward. The first priority is to develop proper measures for both efficiency and quality. For further improvement of quality indicators, an electronic system for patient history records should be built in the near future. A change in the level or the relative ranking seems more desirable than using absolute level alone for incentives. To stimulate medium- and small-scale hospitals to join the program in the next phase, it is suggested that the scope of application be expanded and the level of incentives adjusted. High-quality indicators of clinical care quality should be mapped out by combining information from medical claims and information from patient registries.     

Does the Frequency of Pay-for-Performance Payment Matter?—Experience from a Randomized Trial

Objective. To examine the effects of incentive payment frequency on quality measures in a physician‐specific pay‐for‐performance (P4P) experiment. Study Setting. A multispecialty physician group practice. Study Design. In 2007, all primary care physicians (n=179) were randomized into two study arms differing by the frequency of incentive payment, either four quarterly bonus checks or a single year‐end bonus (maximum of U.S.$5,000/year for both arms). Data Collection/Extraction Methods. Data were extracted from electronic health records. Quality measure scores between the two arms over four quarters were compared. Principal Findings. There was no difference between the two arms in average quality measure score or in total bonus amount earned. Conclusions. Physicians' responses to a P4P program with a small maximum bonus do not differ by frequency of bonus payment.     

Towards population-based payment models in a multiple-payer system: the case of the Netherlands

The Dutch private multi-payer system is characterised by a catalogue that is dominated by fee-for-service based payments. Up to now, alternative payment models have not taken flight. Recent small-scale experiments show substantial potential benefits of population-based payment models. Drawing on international literature and two expert focus groups, we analyse how population-based payments may be taken up more fiercely in a system run on the principles of managed competition.The decentralised nature of the Dutch system naturally aligns with a bottom-up implementation approach. Payers and providers can initiate population-based payment systems to fit local needs, but should determine clear preconditions that focus on quality of care. Quality indicators tied to financial incentives, such as shared savings, might minimise risks of undertreatment. Deliberative processes between payer and providers may determine adequate indicators. Upfront investments are needed to facilitate necessary data infrastructure. Furthermore, alternative payment systems might be encouraged through nationally set default options towards integrated payment systems, potentially reducing administrative burdens. Strong leadership, trust, and mutual understanding are paramount to overcome silos to integrate services across providers. Policymakers in other multi-payer managed competition systems may benefit from these insights.     

The influence of bonus payments to doctors on hospital revenue: results of a quasi-experimental study

There is wide consensus that the ways in which providers are reimbursed by third parties will affect their behaviour and, hence, the efficient use of limited resources and the performance of health systems. However, there seems to be little evidence on how payment to hospital-based doctors affects hospital performance. This paper reports a case study conducted in China on the effects of different types of bonus payment to doctors, with a focus on how bonus payment might have affected hospital revenue growth. This has been an increasingly important goal of public hospitals as they have gained increased autonomy. A set of longitudinal quasi-experimental data, and a set of cross-sectional data, both derived from 108 public hospitals, were used for the analysis. It was found that, when a bonus system was introduced, and when the bonus model switched from one with a weaker incentive to provide services to one with a stronger incentive, there was a consistent sudden increase in the rate of growth of hospital revenue. Bonus type was also associated with the size of hospital service revenue. The results highlight the potential risks of linking remuneration too closely with revenue generation, and the need to ensure adequate attention to mechanisms of control and accountability when hospitals are given greater autonomy.     

256家医院质量管理组织结构调查与分析

目的了解医院质量管理组织设置、职能范围、影响因素等,为下一步工作改进提供参考。方法采用问卷调查法,从组织架构、人员结构、管理职能、工具应用与激励措施、影响因素5个方面调查医院质量管理组织结构。结果不同形式下质量管理组织人员组成以及部分管理职能比较具有统计学意义（P<0.05）;品管圈与追踪评价法在质量管理中应用较广泛,且95.31%的医院采取了激励措施;影响因素的重要性与现状满意度不对等。结论医院应建立结构合理、功能定位明确的质量管理组织体系,加强复合型人才培养,进一步推动质量管理信息系统建设,并积极推进质量管理工具应用。     

The relationship between hospitals and health plans organizations in the scope of ANS Health Insurance Qualification Program

In Brazilian health insurance sector, the fee-for-service model still remains the major payment method for health services, and predominates in the relationship between hospitals and private health insurance companies. After the creation of Health Insurance Qualification Program (HIQP), which focuses on the quality of the assistance given to consumers, the health insurance companies will be evaluated by health care performance indicators, established by this program. The present study discusses the impact of this pattern on the relationship between health insurance companies and hospitals, by analyzing data from interviews carried through with 18 health insurance managers, regarding the use - in hospital management - of performance indicators compatible to those adopted by HIQP. According to the managers perception, only three hospitals use this sort of indicators, two of them which are hospitals managed by the health insurance companies. The alignment of interests between health plans organizations and health care providers, at the HIQP proposed template, will imply changes in payment models between these market players, towards the inclusion of performance and quality of assistance given to users by providers, as components of wage determination.     

A behavioral model of clinician responses to incentives to improve quality

The use of pay for performance (P4P) and public reporting of performance (PR) in health care is increasing rapidly worldwide. The rationale for P4P and PR comes from experience in other industries and from theories about incentive use from psychology, economics, and organizational behavior. This paper reviews the major themes from this prior research and considers how they might be applied to health care. The resulting conceptual model addresses the dual nature (combining direct financial and reputational incentives) of the initiatives many policymakers are pursuing. It also includes explicit recognition of the key contextual factors (at the levels of the markets and the provider organization) and provider and patient characteristics that can enhance or mitigate response to incentives. Evaluation of the existing literature (through June 2005) about incentive use in health care in light of the conceptual model highlights important weaknesses in the way that trials have been reported to date and suggests future research topics.     

Implications for Medicare Reimbursement Policy

This project assessed case mix differences between 299 hospital-based and 354 freestanding clients randomly selected from 20 home health agencies in nine states in 1982. Similarities between hospital-based and freestanding clients outweighed their differences, suggesting that no reimbursement differential is warranted for the two types of providers at this time. Medicare's prospective payment system for hospitals may result in more pronounced case mix differences between the two modalities in the future. Basing payment on case mix is therefore appropriate in order to provide incentives for treating different types of Medicare home health beneficiaries.     

Hospital-based and freestanding home health case mix: implications for medicare reimbursement policy.

This project assessed case mix differences between 299 hospital-based and 354 freestanding clients randomly selected from 20 home health agencies in nine states in 1982. Similarities between hospital-based and freestanding clients outweighed their differences, suggesting that no reimbursement differential is warranted for the two types of providers at this time. Medicare's prospective payment system for hospitals may result in more pronounced case mix differences between the two modalities in the future. Basing payment on case mix is therefore appropriate in order to provide incentives for treating different types of Medicare home health beneficiaries.     

Value-based purchasing for medical devices

The performance of the medical device sector falls short of its remarkable potential because of weaknesses on the demand side of the market, in the way products are assessed, purchased, and used. This paper applies the core principles of value-based purchasing (integrated data on price and performance; alignment of financial incentives; and organizational capability to evaluate alternatives) to the medical device market. Emphasis is placed on the challenges posed by information inadequacies, incentive misalignments, and organizational fragmentation between hospitals and surgeons.     

Practical issues in the design and implementation of pay-for-quality programs

Health plans, healthcare purchasers, and provider organizations throughout the United States are crafting pay-for-performance programs with the intent of improving the quality of care and with recognition of the need to restrain rapidly rising costs. Health plans and large, self-insured employers have typically led the movement toward using quality scorecards with which to gauge hospital and physician performance, coupled with the use of financial incentives directed at hospitals, physician group practices, and individual physicians and practice teams. In this article we provide a conceptual perspective for understanding the objectives and constraints of payers and providers as they wrestle with the next generation of pay-for-quality (P4Q) programs. We identify a set of practical issues that must be addressed in developing and conducting P4Q programs in different market environments. Those issues include specific strategies for choosing quality metrics, units of accountability, size of incentive, data and measurement systems, payout formulas, and collaboration among payers. We illuminate these issues by considering different approaches in light of real-world P4Q demonstrations underway in the Rewarding Results program, in Bridges to Excellence program, and in specific provider organizations we interviewed over the years. The discussion of practical issues highlights principles and examples directly relevant to hospitals and physician organizations that are considering participation in P4Q as well as to those reexamining their physician compensation mechanisms.     

Medicare's New Hospital Value-Based Purchasing Program Is Likely To Have Only A Small Impact On Hospital Payments

Medicare's new hospital pay-for-performance program for all acute care hospitals will begin in October?2012. It will be the largest Medicare quality improvement initiative for hospitals to date. Using 2009 data on hospital performance, we calculated hospital performance scores and projected payments under the new program for all eligible hospitals. Despite differences across hospitals in terms of performance, expected changes in payments were small, even for hospitals with the best and worst performance scores. Almost two-thirds of hospitals would experience changes of just a fraction of 1 percent. Although the program will in effect redistribute resources among hospitals, our data suggest that the redistribution is not likely to cause major problems because the amount being redistributed is also small. These results raise questions about whether the new pay-for-performance program will substantially alter the quality of hospital care, and they highlight the challenges of designing effective quality improvement incentives.     

The impact of financial incentives and a patient registry on preventive care quality: increasing provider adherence to evidence-based smoking cessation practice guidelines

BACKGROUND: This study tested the effects of two organizational support processes, the provision of financial incentives for superior clinical performance and the availability of a patient (smoker) registry and proactive telephone support system for smoking cessation, on provider adherence to accepted practice guidelines and associated patient outcomes. METHODS: Forty clinics of a large multispecialty medical group practice providing primary care services were randomly allocated to study conditions. Fifteen clinics each were assigned to the experimental conditions "control" (distribution of printed versions of smoking cessation guidelines) and "incentive" (financial incentive pay-out for reaching preset clinical performance targets). Ten clinics were randomized to receive financial incentives combined with access to a centralized patient registry and intervention system ("registry"). Main outcome measures were adherence to smoking cessation clinical practice guidelines and patients' smoking cessation behaviors. RESULTS: Patients' tobacco use status was statistically significant (P < 0.01) more frequently identified in clinics with the opportunity for incentives and access to a registry than in clinics in the control condition. Patients visiting registry clinics accessed counseling programs statistically significantly more often (P < 0.001) than patients receiving care in the control condition. Other endpoints did not statistically significantly differ between the experimental conditions. CONCLUSIONS: The impact of financial incentives and a patient registry/intervention system in improving smoking cessation clinical practices and patient behaviors was mixed. Additional research is needed to identify conditions under which such organizational support processes result in significant health care quality improvement and warrant the investment.     

Developing a performance-based incentive program for hospitals: a case study from Maine

A health care coalition in Maine has piloted a performance-based incentive payment program that creates a single statewide program, based on common standards. Incentive payments were funded by a hospital's financial guarantee that was matched by employers. A two-step incentive allocation methodology differentiates adequate and superior performance. The incentive model is sufficiently flexible to accommodate different settings and evolving performance standards. This case study provides useful insights to payers and hospitals that are considering similar regional initiatives, emphasizing the collaborative context that underscored this venture.