Do demonstration project’s numbers really validate P4P?
Do demonstration project’s numbers really validate P4P?
Observers say other factors play role in improvement
It’s hard to argue that the data from the first year of the CMS/Premier Hospital Quality Incentive Demonstration (HQID), recently validated by CMS and reported publicly, were anything but impressive. The average improvement across five clinical focus areas, as measured by 33 nationally standardized and widely accepted quality indicators, was 6.6%.
The HQID, which began in October 2003, tracks process and outcome measures in acute myocardial infarction (AMI), heart failure, coronary artery bypass graft (CABG), pneumonia, and hip and knee replacement. Composite quality scores, an aggregate of all quality measures, improved between the first and last quarters of the first year of the demonstration in all areas:
- from 87% to 91% for patients with acute myocardial infarction (heart attack);
- from 65% to 74% for patients with heart failure;
- from 69% to 79% for patients with pneumonia;
- from 85% to 90% for patients with coronary artery bypass graft;
- from 85% to 90% for patients with hip and knee replacement.
"We have also seen [preliminary] results for the first three quarters of the second year, and the trend since the first year is outstanding; we’ve seen improvement in every single disease group," notes Stephanie Alexander, MBA, senior vice president of Premier Inc. in Charlotte, NC. "Even the second year continues to see aggregate improvement over all hospitals."
In fact, the numbers were so strong they prompted one CMS official to declare triumphantly, "We are seeing that pay-for-performance works."
Other quality experts, however, counter with a "not-so-fast" warning. They note, first of all, that for most participating hospitals the financial incentive was not all that impressive. Hospitals in the top 10% for a given condition were given a 2% bonus on their Medicare payments for that condition, and hospitals in the second 10% were given a 1% bonus. Medicare is awarding a total of $8.85 million to hospitals that showed measurable improvements in care during the first year of the program, with the largest total award — $847,000 — going to Hackensack University Medical Center in New Jersey.
This, in turn, leads to speculation that other factors, such as public reporting, also may be playing a role in the desire of hospitals to improve quality.
Finally, observers point out, P4P plans require further refinement such as rewarding improvement as well as performance and, in fact, CMS and Premier do regularly revisit their incentive plan.
Leaders already on track
One of the biggest challenges in evaluating P4P projects is that most top performers already are involved in other forms of performance measurement collaboratives and/or are pursuing excellence on their own initiative.
For example, Charles Riccobono, MD, chief quality officer and chairman of the performance improvement department at Hackensack, notes that he took the 1999 Institute of Medicine report "kind of personally."
His facility, he notes, has been seeking to comply with many of the recognized quality measures "for awhile." For example, the hospital participates in the "Pursuing Perfection" program, funded by The Robert Wood Johnson Foundation and led by the Institute for Healthcare Improvement (IHI).
"Obviously, once we signed on [to HQID] there was an incentive effect, which filters down from leadership," he admits, "Although I must say we were pretty quality-driven here from the beginning — even when there was no such thing as P4P."
Hackensack, he says, already was committed "to doing what we should do, according to science’s best measures for quality, so we were pretty much in the game all along," adding that "For me, this is my job."
This raises one of the main criticisms of P4P put forth by Patrice L. Spath of Brown Spath Associates, Forest Grove, OR. "I still have this basic problem of saying, You’ve gotta pay us extra for us to do the right thing,’" she asserts. "It’s basically saying to providers that we will pay you extra for doing what you should have been doing anyway."
Nevertheless, says Riccobono, there is merit to the incentive structure. "This was in the nature of a bonus for hospitals, and I think anything that actually functions as an incentive to get people talking about quality issues is a good thing," he states. "And if you look at the whole picture, it seems like everybody did better — not just in the top deciles. Even people who came to it later than sooner managed to improve their compliance with the measures. I think it’s a success from that perspective."
"Our hospitals have been able to put in some real change practices, and their willingness to share with others is one of the enablers," adds Alexander. "The great things about those better practices are most are not costly to hospitals they don’t require a new IT system, for example. In most cases quality came more through very, very good team involvement physicians, nurses, and administration working together on behalf of patients to get to these highest quality standards."
How much of a role?
Experts agree that with other factors in play, it’s difficult to determine exactly what role the financial incentive played in the quality performance of the participating hospitals.
"I absolutely cannot say that 100% [of performance] was due to incentive pay, because $8.8 million is really not very much money, and 80% of the hospitals did not receive anything," notes Alexander. "I believe the reasons for the improvement that this project was demonstrating were not only incentive pay but also public reporting; half of these hospitals have to report performance, so that was built in. The other key factor is the leadership of these CEOs — they want to improve quality, and in a group they could learn from the knowledge transfer. So, I cannot say that any one of these three things was more of an enabler than the others."
"I think a lot of doctors are driven by thinking that if the spotlight is on you, it’s in everyone’s interest to look good," adds Riccobono. "It seems there is a conviction among the powers that be that they want to know who the good docs and hospitals are, so that’s not an unreasonable response."
What about rewarding improvement?
"One factor people have not given enough time to is public reporting of data," says Spath. "It takes awhile for people to realize that the data is even there, so throwing P4P at it so soon may be disguising that fact that it’s the public reporting of data that caused people to do the right thing."
Even proponents of P4P recognize that it is an evolving approach to rewarding quality, and that the models currently being employed can be improved upon. In fact, one of the newer proposals for modification entails just that rewarding improvement.
"People are talking about changing the model to pay-for-improvement," observes Spath. "Someone at 40% has to do an awful lot to get to 90%. To move from 40% to 60% is good, but they’re not getting anything for it. Plus, someone at 85% may not improve, yet will continue to get money."
The idea of rewards for incremental improvements appeals to Spath. "It just seems to make more sense; otherwise, you can become complacent when get in the top 10th percentile," she notes.
"That’s a valid concept," echoes Riccobono. "I don’t think this bonus for being at the top is necessarily the way to do this. Whatever you do, the government ought to share with you in whatever your savings are, so you are incentivized to do better — I’m not sure this bonus structure addresses that. This would probably be more meaningful, and get more people to improve."
"I think we should be looking at both attainment as well as rewarding for improvement," adds Alexander. "And, at some point, we need to be looking at a threshold level of performance of quality. If we pay for attainment and improvement, at some point you need to have your quality levels at a certain level." In fact, she notes, the HQID does have a threshold level at the third year.
Another problem with the current program, says Spath, is that "There’s a whole bunch of critical access hospitals not involved in this program — and they are probably the ones that most need improvement."
Alexander doesn’t disagree. "We have three [critical access hospitals in the program] and they are doing very well at improvement, but on the quality side you need to include all of them," she says.
Riccobono does see the need for continual refinement of this and other P4P projects. "My only minor criticism of rewarding hospitals is that it doesn’t help specifically to align physicians in hospitals, to make it a uniform incentive to do well," he says. "Somewhere down the line incentives will play a role, but at the same time, are these measures the right measures? Are there better ones? How can we align docs and hospitals together? Where should the money go? Somewhere way down the road, did this actually improve quality of care? A lot of these are process questions."
Alexander agrees, adding that in fact Medicare already is looking at such issues. "Medicare is looking at aligning physician payment with hospital payment — which is not done now," she says.
[For a complete review of the demonstration, the year-one results, and to view those hospitals ranking in the top 50% in each focus area, visit www.premierinc.com/qualitydemo.]
For more information, contact:
Patrice L. Spath, Brown Spath Associates, P.O. Box 721, Forest Grove, OR 97116. Phone: (503) 357-9185. E-mail: [email protected].
Stephanie Alexander, MBA, Senior Vice President, Premier Inc., Charlotte, NC. Phone: (704) 733-5446.
Charles Riccobono, MD, Chief Quality Officer and Chairman of the Performance Improvement Department, Hackensack University Medical Center, Hackensack, NJ. Phone: (201) 996-2882.
Its hard to argue that the data from the first year of the CMS/Premier Hospital Quality Incentive Demonstration (HQID), recently validated by CMS and reported publicly, were anything but impressive.Subscribe Now for Access
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