| Study Shows Unfair Bonus Payments For
Safety-Net Hospitals
A new study comparing quality of care in
safety-net and
non-safety-net hospitals determined pay-for-performance (P4P) awards
are based on impractical measurement conclusions and creates an uneven
payment system.
"Safety-net hospitals may not get the economic
benefits
from public reporting and pay-for-performance that other hospitals do,"
the researchers said in the study, "Comparison of Change in Quality of
Care Between Safety-Net and Non-Safety-Net Hospitals."
"Our study suggests that safety-net hospitals may
be
unable to compete for performance bonuses. This has the potential to
have deleterious effects on existing financial and clinical disparities
in performance," they said.
P4P determines bonuses based on the decile ranking
for
the hospitals based on 33 reported measures of quality. Hospitals in
the top decile received 2 percent of their Medicare diagnosis related
group (DRG) payments, the second decile received 1 percent.
The comparison study observed reported data from
2004-2006. During the third year of the study hospitals with a
performance level below the 9th and 10th deciles were financially
penalized, 1 percent and 2 percent respectively, the study said.
"For example, hospitals in the 10th decile for
percentage of Medicaid patients (mean of 54.5 percentMedicaid patients)
would have received bonuses across the three clinical conditions worth
0.3 percent of their total DRG payments in 2004. In 2006, under the CMS
pay-for-performance demonstration rules, these hospitals on average
would have incurred a performance penalty of 0.1 percent for acute
myocardial infraction (AMI) and heart failure and a reduction in their
pneumonia bonus (from 0.3 percent to 0.2 percent)," the study said.
The following table shows the performance change
and the
difference between hospitals with a low and high amount of Medicaid
patients collectively from 2004-2006:
|
Characteristic
|
Low
|
High
|
Difference (%)
|
|
(Change in performance)
|
|
|
Medicaid patients percent
|
5
|
40
|
|
|
AMI
|
|
Aspirin at admission
|
1.8
|
0.9
|
50
|
|
Aspirin at discharge
|
4.4
|
1.4
|
68
|
|
ACE inhibitor for LV dysfunction
|
9.2
|
6.0
|
35
|
|
Beta blocker at admission
|
4.4
|
2.9
|
34
|
|
Beta blocker at discharge
|
6.4
|
3.1
|
52
|
|
Composite AMI score
|
3.8
|
2.3
|
39
|
|
Heart Failure
|
|
Assessment of LV function
|
7.7
|
5.9
|
23
|
|
ACE inhibitor for LV dysfunction
|
9.2
|
9.0
|
2
|
|
Composite heart failure score
|
8.0
|
6.6
|
18
|
|
Pneumonia
|
|
Oxygenation assessment
|
1.4
|
1.5
|
-7
|
|
Pneumococcal vaccination
|
27.4
|
22.7
|
17
|
|
Timing of initial antibiotic therapy
|
7.1
|
6.4
|
10
|
|
Composite pneumonia score
|
9.3
|
8.0
|
14
|
"Over time, trends such as these could damage the
reputations of safety-net hospitals and worsen their financial status,
potentially reducing their ability to further respond to
quality-improvement incentives," the researchers said.
Being a safety-net hospital with a large patient
base
consisting of Medicaid beneficiaries prevents hospitals from being able
to improve their performance levels as easily as
non-safety-net-hospitals. The ability to improve on the quality
measures is the determinant on how much a hospital is paid in bonuses.
"The small differences in payments over the short
term
may translate into much larger differences over the long-term, because
poor financial performance could lead to smaller investments in quality
improvements that in turn, further worsen both financial and clinical
performance. With lower baseline performance and few resources to
invest in improvement, incentives designed to stimulate quality
improvement may exacerbate existing disparities, with rich hospitals
getting richer and poor hospitals becoming poorer," the researchers
said.
The solution the researchers provide is that
"pay-for-performance could be redesigned to minimize unintended
consequences. For example, providing improvement-based bonuses or
paying each time appropriate care is delivered, rather than basing
payment on achieving target thresholds, may reduce safety-net
hospitals’ disadvantages."
The researchers defined safety-net hospitals as
hospitals delivering care to a large percentage of Medicaid patients.
The study compared 3,665 hospitals enrolled in the P4P demonstration
from 2004-2006, looking specifically at only 10 measurements that
applied to 3 out of 5 clinical conditions in the demonstration. The
lead investigator was Dr. Rachel Werner, Philadelphia Veterans Affairs
Medical Center, Division of General Internal Medicine at the University
of Pennsylvania.
Address: University of Pennsylvania, 3451 Walnut
Street, Philadelphia, PA 19104; (215) 898-5000, www.upenn.edu.
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