October 4th, 2016

Pay-for-Performance Programs in Hospitals: Part 2


Overall, the programs focus on improving health outcomes and lowering system-wide expenditures; however, there are multiple paths to achieving pay-for-performance (P4P) goals.

Is P4P working?

recent study published in BMJ finds “no evidence that [HVBP] has led to better patient outcomes” three years after introduction of the program.

Further, the researchers report that trends in 30-day mortality for target conditions (heart attack, pneumonia and heart failure) among HVBP-participating hospitals actually worsened after the program started.

“Even among hospitals with [the] worst patient mortality at baseline — a group of hospitals that had arguably more motivation to improve to avoid penalties — we found no evidence that HVBP drove improvement beyond secular trends observed in a matched group of non-HVBP hospitals,” the study report states. “Taken together, these findings call into question the effectiveness of the national hospital pay-for-performance program and whether it is having the desired effect on patient outcomes.”

Senior author of the study, Ashish Jha, MD, MPH, in an interview with the Harvard School of Public Health, admits surprise at the results: “While improving outcomes is hard, we had hoped that hospitals would have taken the pay-for-performance program as a signal to improve their care.”

Avenues ahead

Jha suggests that current HVBP bonuses and penalties (up to 2 percent of total Medicare payments) are too small to drive hospitals to make significant changes. “What if we experimented with 5 percent or 10 percent?” he asks. “Something like that should motivate organizations to invest in improvement.” Jha also notes that the current incentive scheme is over-complicated and includes too many measures that fail to motivate improvements in care.

Pay-for-Performance in hospitals: Does it work? http://ajilon.co/2dMRNM7 via @ajilon

All the same, metrics need to remain part of any future quality improvement program, according to Robert Berenson, MD, fellow at economic and social policy think tank Urban Institute. Nonetheless, such measures must be vetted more carefully and assessed for statistical significance while avoiding unintended consequences such as hospitals declining service to challenging patients or specialists migrating to large medical centers rather than remaining in independent practice.

Another expert, Stephen Soumerai, a professor of population medicine at Harvard Medical School, makes the case for controlled trials in which patients would be randomly assigned to either P4P or non-P4P hospitals for comparison of results. Soumerai also points out that healthcare policymakers tend not to talk to providers in the field about what might improve practice. “[They] need to become much better at understanding the conditions in which doctors work that aren’t captured by theory,” he explains.

Competition for top talent

Whatever shape P4P ultimately takes, U.S. hospitals will be competing for talent in the evolving environment over the immediate horizon. In particular, individuals who can help align data collection and analysis with clinical outcomes will be high-value candidates.

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