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Medicare value-based purchasing project shows any hospital can achieve positive results, regardless of size, location or patient-payer mix

Safety net hospitals enhanced quality, reduced variation in care delivery in just three years

Washington, D.C. (August 6, 2009) – Safety net hospitals have improved patient quality and reduced care variation as a part of the nation’s largest hospital value-based purchasing (VBP) program, according to an analysis released today by the Premier healthcare alliance.

Although hospitals serving a large percentage of disproportionate share patients performed below others at the outset of the Centers for Medicare & Medicaid Services (CMS), Premier Hospital Quality Incentive Demonstration (HQID) VBP project, differences in quality lessened after three years in the clinical areas of heart attack, heart failure and hip/knee replacement. Comparing the Composite Quality Scores, the aggregate of all clinical quality measures within each clinical area, of safety net and non-safety net hospitals from year 1 to year 3 yielded the following results:

In pneumonia, hospitals with the highest percentage of disproportionate share patients continued to lag behind their counterparts in year three, but these same facilities made greater improvements (17.5 percent compared to 14.7 percent than others in this area), suggesting that the performance gap is continuing to narrow with time.

Also after three years the underrepresentation of safety net hospitals dissipated for hospitals receiving awards that recognize facilities for performance in the top 20 percent of all participants.

"The program creates a dynamic where the work is never done – quality goals keep getting more aggressive because as a group, HQID hospitals are improving rapidly over time," said Jack Garon, MD, Chief Medical Officer at Sinai Health System of Chicago. "We focus on current performance, and our goal remains staying in the top 10%, which means we must continually improve. The program has incentivized us to chase the top levels of performance. It has also helped us develop quality improvement tools we use to address other quality issues. This program gives everyone the clear goals and the focus they need to eliminate care variations so that all patients - no matter where they live or what hospital they visit - receive the same evidence-based, high-quality care.”

Cathy Robinson, vice president, Rush Foundation Hospital of Meridian, MS, said “It has been suggested that rural or safety net hospitals will struggle as part of value-based purchasing or pay-for-performance programs. While we certainly face unique challenges as a rural, safety net facility and have needed time to effectively implement the evidence-based protocols required in HQID, our successes and those of the other safety net participants clearly show that any hospital can deliver high-quality care.”

The HQID project is the basis for CMS’ proposal to Congress for a national VBP or pay-for-performance (P4P) program. The project also has been cited as a key principle for health reform by members of the Senate Finance Committee, as well as members of the Democratic Blue Dog coalition in the House of Representatives. However, concerns have been expressed that the program would reward certain classes of hospitals over others. The research found that hospitals, regardless of size or location, can succeed in VBP. There are, however, differences related to hospitals based on the patient-payer mix.

Premier president and CEO Susan DeVore said, “Through our work in HQID, we have learned the critical components of an effective VBP program. We believe that, properly structured, VBP is a powerful engine for performance improvement that will enhance quality, reduce variation and avoid unnecessary costs.

“Current VBP proposals are structured appropriately to allow all hospitals to succeed, regardless of size, location or patient/payer mix,” continued DeVore. “We are confident that if our recommendations are followed, VBP will be an effective national reform that will improve quality, reduce variation and avoid unnecessary costs.”

To address this, findings from Premier’s research of safety net hospital performance suggest that VBP policies should:

About the HQID project
HQID is the first national project of its kind, designed to determine if economic incentives to hospitals are effective at improving the quality of inpatient care. Some 250 hospitals across 36 states are participating in the demonstration, including small/large, urban/rural, and teaching/non-teaching facilities that volunteered to report their quality data for five high-volume inpatient conditions using national measures of quality care.

For the first three years of the project, which were evaluated as part of this research, Premier collected from participants data based on adherence to a set of more than 30 evidence-based clinical quality measures, developed by government and private organizations. The Composite Quality Score improved by an average of 15.8 percent during the project’s first three years.

Improvements in quality of care have saved the lives of an estimated 2,500 heart attack patients in the first three years of the project, and patients received approximately 300,000 additional recommended evidence-based clinical quality treatments, such as smoking cessation, discharge instructions and pneumococcal vaccination, during that same timeframe. In the project’s first three years, CMS has awarded more than $24.5 million to top performers.

Additional Premier research indicates that by March of 2008, HQID participants scored on average 6.9 percentage points higher (94.64 percent to 87.36 percent) than non-participants on 19 performance measures used by Hospital Compare, the government’s scorecard for hospital quality.

New payment model helps drive additional improvements
CMS extended the project for three more years through 2009 to test the effectiveness of new incentive models and ways to improve patient care. Beginning with Year Four results, (to be released later this month) participants are eligible to receive the following awards:

  1. Attainment Award – Hospitals that attain or exceed the median level composite quality score (CQS) benchmark from two years prior will receive an incentive payment.
  2. Top Performer Award –The top 20 percent of hospitals in each clinical area will receive an additional incentive payment. This group also will receive the Attainment Award.
  3. Improvement Award – Hospitals that attain median level performance and are among the top 20 percent of hospitals with the largest percentage quality improvements in each clinical area will receive an additional incentive payment.

Hospitals are can receive up to two incentive payments for each clinical condition; either attainment and top performer or attainment and improvement.

About Premier Inc., 2006 Malcolm Baldrige National Quality Award recipient
The Premier healthcare alliance is more than 2,300 U.S. hospitals and 64,000-plus other healthcare sites working together to improve healthcare quality and affordability. Owned by not-for-profit hospitals, Premier maintains the nation's most comprehensive repository of clinical, financial and outcomes information and operates a leading healthcare purchasing network. A world leader in helping deliver measurable improvements in care, Premier works with the Centers for Medicare & Medicaid Services and the United Kingdom's National Health Service North West to improve hospital performance. Headquartered in Charlotte, N.C., Premier also has offices in San Diego, Philadelphia and Washington. Follow Premier on Twitter.

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