Study: Pay for performance could save lives, costs

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A new study from the Premier Inc. healthcare alliance shows that wider adoption of quality measures such as those demonstrated in a Medicare pay-for-performance project could save thousands of lives and reduce costs.
The report evaluated patients treated for pneumonia, heart bypass, heart attack, and hip and knee replacements nationally that received most or all of a set of established care processes in 2004. The results should that if all patients in that year were treated with the guidelines it could have resulted in nearly 5,700 fewer deaths; 8,100 fewer complications; 10,000 fewer readmissions; and 750,000 fewer days in the hospital. In addition, hospital costs could have been as much as $1.35 billion lower, according to Premier.
“This analysis is extremely valuable because it provides empirical evidence supporting the concept of the business case for quality,” said Peter K. Lindenauer, M.D., MSc, medical director, Clinical and Quality Informatics for Baystate Health in Springfield, Mass. “Not only is it possible for hospitals to provide high-quality care efficiently, but in fact those institutions that achieve outstanding quality performance appear to benefit from reduced costs and improved outcomes.”
The analysis is based on data from Premier’s Hospital Quality Incentive Demonstration (HQID) pay-for-performance demonstration project with the Centers for Medicare and Medicaid Services (CMS). Through that project, Premier collects a set of 33 quality indicators from more than 250 hospitals across the country.
"Our nation's current healthcare payment system pays all hospitals the same way regardless of the quality of care delivered," said U.S. Representative Sue Myrick. "These new findings point the way toward a payment system that rewards hospitals for delivering higher-quality care. A common-sense, outcomes-based system will hopefully be a better one for both patients and hospitals."
Congress has mandated that Medicare develop a plan to implement “value-based purchasing,” which ties payment to quality of care and other outcomes, beginning in 2009. The CMS/Premier HQID project is a test of one value-based purchasing model.
The analysis grouped patients by the number of care processes they received and then examined costs and outcomes across each group.