Gainsharing program alters physician behavior
LOS reduced, quality improved
Would you give your physicians a $19 million bonus? What if you knew doing so would save you $113 million, cut your length of stay and improve quality? That’s what a group of New Jersey hospitals did as part of a pilot program for the Centers for Medicare & Medicaid Services. It was so successful that the group applied for, and was granted, permission to continue the project on a larger scale.
Take doctors at 12 disparate hospitals and somehow convince them that there will be a no-strings-attached program where they can earn extra money if they improve their performance on key metrics compared to a regional norm and also to their previous performance. You’d think it would be easy, but actually, getting docs on board to participate in the gainsharing project was more difficult than one might think, says Sean Hopkins, senior vice president of health economics at the New Jersey Hospital Association, which oversaw the project.
"There were some who heard the construct of the program and signed up immediately, and an equal number who did not," he says. "They did not believe that it was bonus only with no penalties." In the end, there were some 1,300 physicians involved.
Each individual Medicare case that a participating physician treated was looked at individually. If he or she did well on that case, there would be an additional payment. If he or she did not, there was no penalty and no offset. The first round of bonus checks, six months in, spurred a second round of sign-ups, says Hopkins. After that, it was mostly new physicians coming to the hospitals who were signing up, and no great effort at recruitment was made after the first year.
The amount set for bonuses was 25% of Medicare Part B fees — under the new extended project, Medicare is allowing that to rise to 50%, to be based on a mix of how the physician performed compared to himself and his peers in the region. Hopkins says the money was never spent out from that pool.
The physicians’ performance would be risk-adjusted using APR DRGs, rather than MS DRGs, says Hopkins, because it allowed for more nuance with the patients. "If you had a physician saying he always saw the sickest patients, then you can say that’s OK, we can compare you to others with the sickest patients. It is not just DRG 10, but DRG 10, category 4."
To achieve the bonus, they had to be in the top 25% of peers.
No one had to do anything different, Hopkins says. "No one was going to try to influence the physicians’ decision-making or practice patterns. They could keep doing things just the way they were. But we told them that while they could keep using whatever expensive antibiotic they wanted to, they could also talk to the people in pharmacy, who might have ideas about what their peers are doing that is just as effective, but cheaper."
Doing things as they had always done was an option, he continues, but so was reducing their drug costs. And the people who would point the way would be their peers, whose opinion they respect, he says. "They worried about non-clinicians trying to influence their judgment, and about being judged when they always had the sickest patients. But we were able to convince them that those were not things they had to worry about."
The hospitals had to look at 42 CMS Hospital Quality Alliance measures, as well as stroke and CHF patient monitoring post-discharge. They were also required to keep track of other data specific to the physician, including mortality, readmission rates after a week and after 30 days, and length of stay.
They also had to choose three of the following non-clinical issues to address during the three years: Improve elective admissions planning; identify and fix ED bottlenecks; reduce wait between ordering and getting diagnostic tests and consults; improve OR scheduling and use; improve discharge planning; develop tracking systems to record and monitor results of at least one initiative, and share with other consortium members.
"The sense was that this was an experiment to see if modest, but attention-getting incentives would be enough to change physician behavior," says Hopkins. "Could they be more judicious in their use of hospital resources without a significant amount of oversight?" What they found was that there are certainly things that a doctor does in the clinical realm that impact efficiency and quality — think about issues like rounding and how the timing of that can impact discharges — and non-clinical things that can improve efficiency, as well, such as staffing appropriately so that clinical tests are conducted in a timely manner.
Hopkins says they all noted that, like rounding in the morning, having chart requests dealt with in a timely manner is important to ensuring patient discharge as early as possible. Having physicians get their documentation correct and in the records ensures appropriate reimbursement. And making sure a consultant shows up within 24 hours when called — or faces a penalty like being ineligible for an incentive payment — is key to a patient getting the right care at the right time.
None of what they focused on revolved around withholding or degrading care, says Hopkins. "It was just about making it more timely, about imbuing efficiency and reducing costs." He gives the example of antibiotics and how physicians are often creatures of habit, having learned in medical school to use a particular drug for a particular illness or procedure. But they can also learn new habits, and when new information comes out, ensuring they have that data, as well as information on what their peers are doing, can be key to changing old, outdated behaviors.
Or think about how many physicians order intravenous antibiotics for patients on admission, but do not revisit the issue, even though many patients could be changed to cheaper oral antibiotics, or even taken off of the medication altogether within a short time. "Now, we are giving them an incentive — and a prompt — to review the chart to see if it can be changed or discontinued. That can impact the cost for the hospital, as well as the incentive for the physician, and the well-being of the patient."
Every six months, participating physicians would get a series of reports, Hopkins explains. First, there was a breakdown of expenses by cost center — adults, pediatrics, radiology, or drugs, for example — for their own performance and for the best practice norm. They would get a separate report on how they did against their previous performance for those cost centers. There was also a pie chart that included a section in blue, which was how much the physician earned in bonus that period, and a section in tan, which showed how much money that doctor left on the table by not practicing at the top of the quartile.
The reports made it easy to identify where the doctor was out of line, either with his or her previous performance, or with the norm in New Jersey, Hopkins says. Many of the chief medical officers used the bonus and report time to have one-on-one conversations with the physicians — calling them to the office to deliver the reports and checks. It was also an opportunity to get them to commit to "completing delinquent charts, participate in more quality programs, or attend some training. It was the only time some of the CMOs said they could corner their staff," he says.
The physicians were also encouraged to work with the hospital program coordinator and drill down to the case level if necessary to see where they can focus their energy to make improvements for the next pay period. Hopkins says that position was another key to the program’s success. That person would sift through the reports and look for places where someone needed coaching or educating.
Hopkins says that the collaboration between hospitals — they were required by CMS to talk to each other about their successes on a regular basis as part of the waiver they were given for the incentive program — is something that any organization can learn from. "The Affordable Care Act aims to give people better health, better care and lower costs, and embedded in that is the need to get people to talk to each other. Hospitals to nursing homes, physicians to rehab. Improving provider dialogue, too, is important, and this program accentuates the collaborative dialogue of physicians at hospitals. It matters that they talk to each other about what works and what does not and why."
As for what the hospitals learned as a group from this, it is pretty simple: Money talks, and the more money the better. The 50% Part B stake offered under the new extended gainsharing project has resulted in a much faster sign-up by physicians than the 25% stake did in the original pilot project.
Gainsharing programs like the one in New Jersey are not allowed for Medicare and Medicaid patients without a waiver, as they run up against the Stark laws against self-referral by physicians. It prohibits doctors from referring patients for services to organizations with which they or an immediate family member have a financial relationship — ownership, investment, or compensation arrangement. The law equates the term "referral," for Medicare Part B Services, to any request by a physician for a particular item or services. That can include imaging, PT or OT, radiology, and just about any inpatient services. Exceptions are made in some instances — and of course, situations in which a waiver is granted.
Increasingly, the waivers granted are requiring a guaranteed savings to CMS. In the case of New Jersey’s continuing program, it will mean a half of a percent savings in the first year, 1% the second, and 2% the third. While more than 20 hospitals initially expressed interest, this increasing responsibility to guarantee savings put off seven of them, and has led gainsharing proposals in at least one other state to pause in its consideration.
The question is what happens when these demonstration projects go away. For hospitals in New Jersey, eventually, the law will have to change or these payments will go away, and then, Hopkins says, you can only hope that these new habits will stick and that doctors will not revert to old ways.
For more information on this topic, contact Sean Hopkins, Senior Vice President, Health Economics, New Jersey Hospital Association, Princeton, NJ. Email: firstname.lastname@example.org.