Safety Net Hospitals Improved Quality with Pay-for-Performance Incentives

"We created a scorecard that enabled us to look at these measures at a glance," he says. "We color-coded it. Being in the top 10% would be green. Yellow was top 50%, and red meant we were in the bottom 50%."

Safety net hospitals, also called DSH or "Pickle" (after a Texas congressman) facilities, are defined as those qualifying for disproportionate share money under one of two definitions. For example, they can qualify by being in an urban area with more than 100 beds and receive 30% of net inpatient revenue from state and local revenues for indigent care.

In the category of heart failure, safety net hospitals started out low on adherence to quality measures, 68.4% but improved to 86.3% after three years. Non-safety net hospitals also started out low, at 72.4%, and improved to 88.6%.

In hip and knee replacement, safety net hospitals started at 86.8%, but improved to 94.7%, a 7.9% improvement, while non-safety net hospitals started at 89% and went to 95.5%, a 6.5% improvement.

Scores are achieved by, for example, making sure patients with an acute myocardial infarction receive an aspirin at arrival and that aspirin is prescribed at discharge.

For patients with pneumonia, appropriate care would be in making sure each patient received his or her initial antibiotic within four hours of arriving at the hospital door. For patients with a hip or knee replacement, all would be assessed for their risk of developing a hematoma or hemorrhage.

Also, inpatient mortality rates and whether the patients had to be readmitted for the same illness within 30 days are both scored.

"The research found that hospitals, regardless of size or location, can succeed in value-based purchasing."

The success of value-based purchasing programs like this one organized by CMS and Premier are destined to become much more widespread with a variety of initiatives under discussion in health reform efforts.

Officials for both CMS and Premier suggest three lessons for how to implement a successful national pay-for-performance program:

• Phase in payment incentive programs gradually to give hospitals serving higher numbers of uninsured and the poor more time to adjust.
• Provide technical assistance and resources to hospitals that fall below national thresholds.
• When a hospital's performance scores dramatically improve, reward that dramatic improvement, even if the hospital continues to fall below goals, to create incentives to continue to make rapid improvements.

Overall, improvements in quality of care saved the lives of an additional 2,500 patients who came to the hospital with a heart attack, and all patients received approximately 300,000 additional recommended evidence-based clinical quality treatments. They included smoking cessation, discharge instructions and pneumococcal vaccine.

The demonstration project has been extended another three years and will be extended to new measures, such as consumer assessments, surgical care improvements, and care of patients with ischemic stroke.