NCPA - National Center for Policy Analysis

Effort to Pay Hospitals Based on Quality Didn't Cut Death Rates

March 30, 2012

Medicare's largest effort to pay hospitals based on how they perform -- an inspiration for key parts of the health care law -- did not lead to fewer deaths, a new study has found, says Kaiser Health News.

  • The study casts doubt on a central premise of the health law's effort to rework the financial incentives for hospitals with the aim of saving money while improving patient care.
  • This fall, Medicare is going to start altering its payments to more than 3,000 hospitals based on how patients rate their stays and how completely hospitals follow a handful of clinical guidelines for basic care.

That effort, the Hospital Value-Based Purchasing Program, is modeled on a six-year project called the Medicare Premier Hospital Quality Incentive Demonstration (HQID).

  • Between 2003 and 2009, the 252 hospitals participating in the program were measured on three dozen performance metrics, including their mortality rates for heart attack and heart bypass surgery.
  • Those that did best earned bonuses, and those that did the worst lost money.
  • But the study published in the New England Journal of Medicine found that the mortality rate at the participating hospitals was virtually the same as the mortality rate for the 3,363 hospitals that were not part of the project.
  • While the mortality rate dropped slightly over the course of the project among the participating hospitals, it also dropped for the other hospitals.

Source: Jordan Rau, "Effort to Pay Hospitals Based on Quality Didn't Cut Death Rates, Study Finds," Kaiser Health News, March 28, 2012.  Ashish K. Jha et al., "The Long-Term Effect of Premier Pay for Performance on Patient Outcomes," New England Journal of Medicine, March 28, 2012.

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