Does Winning a Pay-for-Performance Bonus Improve Subsequent Quality Performance? Evidence from the Hospital Quality Incentive Demonstration

By Andrew Ryan, Matthew Sutton and Tim Doran
HSR, April 2014

To test whether receiving a financial bonus for quality in the Premier Hospital Quality Incentive Demonstration (HQID) stimulated subsequent quality improvement.

Under the HQID, hospitals received a 1 percent bonus on Medicare payments for scoring between the 80th and 90th percentiles on a composite quality measure, and a 2 percent bonus for scoring at the 90th percentile or above.

We found little evidence that hospitals’ receipt of quality bonuses was associated with subsequent improvement in performance. This raises questions about whether winning in pay-for-performance programs, such as Hospital Value-Based Purchasing, will lead to subsequent quality improvement.

http://www.hsr.org/hsr/abstract.jsp?aid=49319522092

Comment:

By Don McCanne, MD

Quality derives from dedicated professionals, working within a well-designed health care infrastructure, striving to obtain the best health care for their patients.

Politicians and the policy community seem to miss this point as they continue to look for administrative gimmicks that are essentially managed care innovations. What we don’t need in the United States is more administrative excess. Pay-for-performance (P4P) continues to fail as an incentive for true quality improvement, even if some studies have shown almost worthless teach-to-the-test increases in scores.

If we really want quality, we need to work on our health care infrastructure, beginning with implementing a financing system that drives quality – a single payer national health program.

Does Winning a Pay-for-Performance Bonus Improve Subsequent Quality Performance? Evidence from the Hospital Quality Incentive Demonstration

By Andrew Ryan, Matthew Sutton and Tim Doran
HSR, April 2014

To test whether receiving a financial bonus for quality in the Premier Hospital Quality Incentive Demonstration (HQID) stimulated subsequent quality improvement.

Under the HQID, hospitals received a 1 percent bonus on Medicare payments for scoring between the 80th and 90th percentiles on a composite quality measure, and a 2 percent bonus for scoring at the 90th percentile or above.

We found little evidence that hospitals’ receipt of quality bonuses was associated with subsequent improvement in performance. This raises questions about whether winning in pay-for-performance programs, such as Hospital Value-Based Purchasing, will lead to subsequent quality improvement.

http://www.hsr.org/hsr/abstract.jsp?aid=49319522092

Quality derives from dedicated professionals, working within a well-designed health care infrastructure, striving to obtain the best health care for their patients.

Politicians and the policy community seem to miss this point as they continue to look for administrative gimmicks that are essentially managed care innovations. What we don’t need in the United States is more administrative excess. Pay-for-performance (P4P) continues to fail as an incentive for true quality improvement, even if some studies have shown almost worthless teach-to-the-test increases in scores.

If we really want quality, we need to work on our health care infrastructure, beginning with implementing a financing system that drives quality – a single payer national health program.