By Heather T. Gilligan
A hot new trend in health care — rewarding hospitals for better performance — may not be working as intended, according to new research released today.
Pay for performance — as the system is known — is meant to encourage better care than payment based only on fees for services. Currently, most hospitals report information about their quality of care, but are not rewarded for better quality or improvements in care.
The idea of paying for quality instead of just quantity held enough promise that Congress put it into the Affordable Care Act, or federal health reform. Starting in October, hospitals that do the best on certain measures of quality will get bonuses from Medicare.
But the research released today suggests that paying for performance may not give quality of care the expected boost. Expectations that pay for performance will improve patient outcomes “should therefore remain modest,” researchers cautioned.
That caution, however, applies to the particular pay-for-performance model in place at the hospitals examined in the study, says lead author Ashish Jha, Associate Professor of Health Policy and Management at the Harvard School of Public Health. That model is likely to be adopted nationally in October.
“This doesn’t tell us pay for performance doesn’t work,” Jha said. The study does suggest that a better mix of incentives and penalties are needed to improve care, he added.
The study, published today in the New England Journal of Medicine, compares 252 hospitals that are part of a pay-for-performance program (called the Medicare Premier Hospital Quality Incentive Demonstration) to 3,363 hospitals that only report information about their quality.
The study looked at 30-day mortality rates for more than six million patients released from hospitals after treatment for heart attacks, heart failure and pneumonia, as well as hip and knee replacements and bypass surgery.
The study found no difference in 30-day mortality rates for patients treated at pay-for-performance hospitals compared to hospitals that simply reported quality of care.
The traditional payment system, fee for service, however, “clearly doesn’t work,” Jha noted.
He thinks that improving the measures of quality of hospital care, such as evaluations based on patient outcomes, would be a move in the right direction in creating a pay for performance system that improved care.