Pay for performance fails to improve quality

New research published in yesterday's Health Affairs casts even more doubt as to whether pay for performance is working. According to a study of the Premier Hospital Quality Incentive Demonstration, Medicare's flagship incentive plan failed to improve quality at low-performing hospitals, raising questions as to whether the Centers for Medicare & Medicaid Services' sweetheart program can actually generate better quality from the poor-performing providers.

CMS' demonstration project began in 2003 and added design changes in 2006 to encourage greater quality improvement.

"Although the program changes were intended to provide strong incentives for improvement to the lowest-performing hospitals, we found that in practice the new incentive design resulted in the strongest incentives for hospitals that had already achieved quality performance ratings just above the median for the entire group of participating hospitals," study authors wrote.  "...[T]hese hospitals improved no more than others."

The study doesn't look favorably on the Premier Hospital Quality Incentive Demonstration with disappointing results that raise eyebrows on pay-for-performance incentives, in general. Although high-performers benefited, low performers didn't, as the authors noted.

Similarly, a New England Journal of Medicine study published only a few weeks earlier found that the program failed to improve mortality rates, which were similar regardless of whether hospitals were in the bonus program. The mortality rates for patients who had heart attacks, congestive heart failure or pneumonia, or who underwent coronary-artery bypass surgery dropped slightly in both groups.

For more information:
- see the study abstract
- here's the AHA News Now brief

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