Financial Incentives Net Modest Improvements in Hospital Quality

January 26, 2007

SPRINGFIELD, Mass. -- Offering hospitals a relatively small financial incentive improved their quality of care for acute myocardial infarction, heart failure, and pneumonia, researchers here reported.

SPRINGFIELD, Mass., Jan. 26 -- Offering hospitals a relatively small financial incentive improved their quality of care for acute myocardial infarction, heart failure, and pneumonia, researchers here reported.

Public reporting of hospital outcomes data also improved quality, but to a lesser extent than improvements seen in hospitals that participated in a Medicare pay-for-performance pilot project, said Peter K. Lindenauer, M.D., M.Sc., of Baystate Medical Center.

Dr. Lindenauer and colleagues compared quality improvement data from 207 hospitals that participated in the Centers for Medicare and Medicaid Services (CMS) pay-for-performance pilot project, with 406 hospitals that voluntarily participated in a national public-reporting initiative.

CMS and Premier Healthcare Informatics released their analysis of the pay-for-performance data at a press conference today, which prompted the editors of New England Journal of Medicine to immediately release Dr. Lindenauer study, and an accompanying editorial. They had been scheduled for publication on Feb. 1.

According to a press release from Premier, the 260 hospitals that participated in the CMS/Premier Hospital Quality Initiative Demonstration improved overall quality by 11.8% and by doing so saved the lives of 1,284 acute myocardial infarction patients.

In his NEJM paper, Dr. Lindenauer did not report mortality data, and his analysis portrayed a more modest benefit.

The pilot project tracked 10 quality measures-five for acute myocardial infarction, two for heart failure, and three for pneumonia.

The measures were simple, evidence-based interventions such percentage of patients give aspirin and beta blockers for acute myocardial infarction, angiotensin converting enzyme (ACE) inhibitor or an angiotensin receptor blockers (ARB) for left ventricular systolic dysfunction in heart failure, and percentage of pneumonia patients given antibiotics within four hours of arrival.

Dr. Lindenauer said that after adjusting for differences in baseline performance and other hospital characteristics, pay for performance was associated with improvements ranging from 2.6 to 4.1% over two years.

Nonetheless, the improvements were real and Dr. Lindenauer said the improvement was apparent from the bottom up-pay-for-performance hospitals with the worst quality scores at baseline improved their care of acute myocardial infarction patients by 17.8% from 2003, when the pilot project started, to 2005. During the same period, hospitals in the control group that had the worse quality scores at baseline improved acute MI care by 10.3.

Pay for performance hospitals improved pneumonia care by 4.1% and heart failure care by 5.2% (P

Dr. Epstein acknowledged that many have been eagerly awaiting results of the Premier demonstration, but he said the findings "still leave us with many uncertainties."

He recommended caution before adopting any single payment policy, although he pointed out that political pressure is likely to force a CMS decision before needed "fine-grained information about different aspects of pay for performance" is available.

Dr. Lindenauer, too, recommended more study concluding that it would be useful to learn "whether larger incentives or the restructuring of payment models can stimulate more meaningful improvements and to evaluate whether the benefits of those programs outweigh their costs."