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Medicare Pay for Performance for Hospitals May Be Flawed

The Disease Management Care Blog is still waiting to be listed in the CMS' "clear accurate information is essential in times like these" Op-Eds & Blogs web page.  Will the CMS mandarins find favor with this particular DMCB post and include it with the other insightful masterpieces they've linked, like "Health Reform Helps Many" and "Public Service Recognition Week?"

Probably not, says the DMCB.  It's not because the DMCB is again linking this report showing how CMS seems to be incapable of delivering disease management services to its fee-for-service enrollees.  It's not because of this report revealing how Medicare's Hospital Compare isn't having much of an impact on outcomes.

It's because the DMCB is bringing up the inconvenient truth of this independent evaluation of Medicare's Premier Hospital Quality Incentive Demonstration. This demo tested whether pay for performance can increase the quality of care for acute heart attack, chronic heart failure, pneumonia, heart bypass surgery and total knee as well as hip replacements.  33 measures for these conditions were collected from 252 participating hospitals. The hospitals that scored in the top measurement deciles received bonus payments, while those that were underperforming were hit with a payment penalty.

Think of it as "pay-for-performance" for hospitals.

After excluding hip and knee surgery (where mortality rates are very low), the researchers were interested in measuring whether the Premier Incentive Demo was associated with one of the most important outcomes of all: lower death rates. Based on 6 million patients' worth of data from 2002 through 2009, the researchers found that there was no difference in overall 30-day mortality rates for all of the four conditions compared to non-demo hospitals (11.8% vs. 11.7%). In addition, mortality rates for the individual conditions of heart attack, heart failure and pneumonia were no different either. For heart surgery, there was a slight excess of deaths in the Premier group (4.1% vs. 3.3%).

These results are quite a contrast from this Premier press release that estimates that the Demo "saved an estimated 6500 heart attack patients." The DMCB suspects that that particular number was derived and extrapolated from prior studies linking less tobacco cessation or greater aspirin use to improved death rates.

It seems the math may have been wrong. And it was that same math that led the architects of the Affordable Care Act to establish the Medicare Hospital Value-based Purchasing Program ("Hospital VBP"). As the DMCB understands it, it's just now getting underway.


Go to this particular HHS web page and you'll find that the Department....

"...monitors and evaluates programs to assess efficiency and responsiveness and to ensure the effective use of information in strategic planning, program or policy decision making, and program improvement."

Hopefully, the leaders at HHS will be doing precisely that by reexamining its assumptions and it's ability to achieve real value with the Hospital VBP.
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