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Safety Pays

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The Leapfrog Group may have jumped the gun when it introduced its early medical error prevention program in New Jersey back in the early part of this decade. Hospitals participated, but results were mixed at best as leaders complained about the high cost of compliance with the program in return for small rewards.

“New Jersey reacted poorly to Leapfrog when it came out in 2000-2001,” says William H. Finck, director of network initiatives at Horizon Blue Cross Blue Shield of New Jersey in Mount Laurel. “Computer order-entry systems, for example, cost several million dollars to put in, even for a 100-bed hospital. Who pays for it?”

Now, health plans do—or at least they help hospitals invest in patient safety measures by dangling financial rewards to hospitals that meet certain Leapfrog guidelines. Why the change?

Leapfrog introduced a new return-on-investment calculator tool late last year that has made all the difference, says Finck.

The tool helps Blue Cross and other insurers measure the savings likely to be generated if hospitals meet certain safe practices in five clinical areas: heart bypass, heart attack care, angioplasty, community-acquired pneumonia, and deliveries and newborn care. For example, patients who are given a beta-blocker at the time of hospital arrival cost an average of 25 percent less for the insurer than the average patient.

The tool gave Horizon confidence in summer 2006 that it could make a strong business case to increase its reward structure for hospitals that agreed to implement Leapfrog’s basic measure tracking. Horizon recognizes top performers both financially and nonfinancially, says Finck. Although top safety performers get top billing on Horizon’s member Web site, it’s safe to say it’s the financial incentive that made the program work for hospitals facing the high costs of implementation and monitoring.

“While the reward is not huge in the grand scheme of things,” says Finck, “it’s enough to cover the cost of compliance with the program, and hospitals use the level of recognition to hire quality control staff so they can continue to generate recognition.”

Horizon made $6 million in new money available in 2006 as a reward for its participating network hospitals—the better they do on performance measures, the bigger share of the rewards they get. Based on last year’s success, Finck anticipates between $9 million and $10 million will be available in 2007 as seven new hospitals join the Leapfrog measuring program.

—Philip Betbeze