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Validating P4P Improvement: The Data Is In

September 27, 2010
by Mark Hagland
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Interview: Richard Bankowitz, M.D., Enterprise-Wide Chief Medical Officer, Premier

The Charlotte, N.C.-based Premier healthcare alliance has been one of the leading organizations pushing the envelope on quality-based purchasing in the healthcare field for several years. Indeed, Premier healthcare alliance’s core program in this area, the CMS/Premier Hospital Quality Incentive Demonstration (HQID) program, which was launched collaboratively by Premier and the federal Centers for Medicare and Medicaid Services (CMS) in October 2003, has seen more than six years of impressive results, including an overall improvement in measured patient care quality of an average of 17.2 percent over the first four years of the HQID demonstration project, and an estimated 4,700 heart attack patients’ lives saved in the program’s first four years, according to Premier estimates. Meanwhile, a sister initiative, Premier’s QUEST: High Performing Hospitals initiative, has already racked up estimates of 8,043 lives and $577 million saved, as of last October, through that program’s focus on the elimination of avoidable hospital mortalities and on cost savings, across 157 participant organizations.

One of the questions that has been lingering in the minds of some in the healthcare industry has been whether pay-for-performance programs such as those sponsored by Premier can be useful across all types of hospitals, particularly those that care for impoverished and disadvantaged populations, and which typically are resource-poor themselves as institutions. Interestingly, a team of medical researchers led by Ashish K. Jha, M.D., published an article in the Sep. 7, 2010 edition of the Annals of Internal Medicine, entitled “The Effect of Financial Incentives on Hospitals That Serve Poor Patients,” which addressed that very issue. Jha and his co-authors found that, with regard to Premier’s HQID demonstration project specifically, “Among both pay-for-performance hospitals, and those in the national sample, hospitals with more poor patients had lower baseline performance than those with fewer poor patients…[But a]fter three years, hospitals that had more poor patients and received financial incentives caught up for all three conditions, whereas those with more poor patients among the national sample continued to lag.” The authors’ conclusion? “No evidence indicated that financial incentives widened the gap in performance between hospitals that serve poor patients and other hospitals. Pay-for-performance programs may be a promising quality improvement strategy for hospitals that serve poor patients.”

Richard Bankowitz, M.D., enterprise-wide chief medical officer at Premier Informatics, a division of Premier, spoke recently with HCI Editor-in-Chief Mark Hagland regarding the results detailed in the Annals of Internal Medicine study, which was not sponsored by Premier, and the implications of those results for pay-for-performance (P4P) programs going forward in healthcare more generally.

Healthcare Informatics: Were you involved at all in the development of the AIM article?

Richard Bankowitz, M.D.: No, not at all, and in fact, I didn’t even know it was being developed. But we had been looking at our own data in this area. We didn’t go and gather external data as these authors did, but we did an internal study, and found similar results. And we were delighted that those authors came to those conclusions.

HCI: One might assume that one would need a huge amount of resources to participate in and succeed in such programs as HQID, but that’s not the case?

Bankowitz: That’s right, the studies seem to suggest that resource-poor hospitals can improve. Part of this is that there’s a recognition that hospitals really need to address systems of care. A lot of these measures, which are based on evidence-based practices, tend to respond very well to putting in place systems that eliminate the variation that occurs. And the focus that something like the measurement provides, is really the key. And I do think that the financial rewards play some role. We’ve found in our own internal studies, when we’ve looked at those receiving a financial reward, by the third year, there really was no difference between the disproportionate-share hospitals [DSH], and the non-DSH. In the first year of HQID, there were relatively few DSH hospitals participating, but by the third year, their level of participation matched their representation in the industry.