PITTSBURGH The initiation of public reporting and pay-for-performance measures, designed as incentives to improve the quality of care at hospitals, may actually have the opposite effect on those institutions that serve lower-income populations.
That conclusion was based on an analysis of performance data on acute myocardial infarction, heart failure, and pneumonia from approximately 3,600 hospitals in the Web site www.hospitalcompare.com
These so-called safety net hospitals were generally in worse financial condition at baseline, and therefore would have fewer resources to invest in quality improvement. As a result, they could receive lower bonus payments and possibly even incur penalties for not meeting quality improvement standards. "There is concern that reporting and pay for performance could set up a system where rich hospitals become richer and poor hospitals become poorer," said Dr. Werner of the Center for Health Equity Research and Promotion at the Philadelphia Veterans Affairs Medical Center.
After controlling for baseline hospital performance and other variables, investigators found that the percentage point improvements from 2004 through 2006 for the hospitals with the highest quartile of Medicaid population (mean, 40%) were 2.3 for composite measures of acute MI, 6.6 for heart failure, and 8.0 for pneumonia, compared with 3.8, 8.0, and 9.3, respectively, for the hospitals in the lowest quartile (mean, 5%).
As a result of these differences, the safety-net hospitals end up with a far lower probability of ranking among the top two deciles for clinical quality scores, designations that earn hospitals bonus incentive payments in the CMS pay-for-performance demonstration: The top decile of participating hospitals receives 2% of the Diagnosis-Related Group (DRG)-based prospective payment for patients with the measured condition for all Medicare fee-for-service beneficiaries. Hospitals in the second decile receive 1% of the payment amount (www.cms.hhs.gov/Hospital
A nationwide simulation of the CMS demonstration showed that not only would the safety-net hospitals suffer because of lower bonus payments, but they would also be financially penalized to a greater extent. If the CMS demonstration were instituted at all hospitals, the result could be substantially smaller payments for the safety-net hospitals, concluded Dr. Werner, who is also with the division of general internal medicine at the University of Pennsylvania, Philadelphia.
The study was funded by a Career Development Award from the Health Services Research and Development Service of the Department of Veterans Affairs.