Article

The Effect of Financial Incentives on Hospitals That Serve Poor Patients

Harvard School of Public Health, Brigham and Women's Hospital, U.S. Department of Veterans Affairs Boston Healthcare System, Boston, Massachusetts, USA.
Annals of internal medicine (Impact Factor: 17.81). 09/2010; 153(5):299-306. DOI: 10.1059/0003-4819-153-5-201009070-00004
Source: PubMed

ABSTRACT

Providing financial incentives to hospitals to improve quality is increasingly common, yet its effect on hospitals that care for poor patients is largely unknown.
To determine how financial incentives for quality performance affect hospitals with more poor patients compared with those with fewer poor patients.
Retrospective study.
U.S. hospitals.
251 hospitals that participated in the Premier Hospital Quality Incentive Demonstration program and a national sample of 3017 hospitals.
The association between the disproportionate-share index, a marker of caring for poor patients, and baseline quality performance, changes in performance, and terminal performance for acute myocardial infarction, congestive heart failure, and pneumonia for hospitals in the pay-for-performance program and those in the national sample (which did not receive financial incentives).
Among both pay-for-performance hospitals and those in the national sample, hospitals with more poor patients had lower baseline performance than did those with fewer poor patients. A high disproportionate-share index was associated with greater improvements in performance for acute myocardial infarction and pneumonia but not for congestive heart failure, and the gains were greater among hospitals that received financial incentives than among the national sample. After 3 years, hospitals that had more poor patients and received financial incentives caught up for all 3 conditions, whereas those with more poor patients among the national sample continued to lag.
Hospitals in the Premier Hospital Quality Incentive Demonstration may be atypical, and these results may not be generalizable to all hospitals.
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.
Robert Wood Johnson Foundation.

Full-text preview

Available from: annals.org
    • "Measurement of quality based on both mortality and morbidity data has been the object of the US Medicare-Premiere Inc. pay for performance demonstration , implemented in 2003. Findings from studies of the Medicare-Premiere demonstration show that pay for performance's overall impact on quality was little to modest [11] [12] [13]: under the new scheme, processes improved and mortality decreased but the amount of change did not differ between the two groups. A similar analysis on a sample of English hospitals studied the shift from global budget to case payment and examined whether the introduction of payment by results (a fixed tariff case mix based payment system) was associated with changes in key outcome variables measuring volume, costs, and quality of care [14]. "
    [Show abstract] [Hide abstract]
    ABSTRACT: There is an ongoing debate about the effect of different reimbursement systems on hospital performance and quality of care. The present paper aims at contributing to this literature by analysing the impact of different hospital payment schemes on patients' outcomes in Italy. The Italian National Health Service is, indeed, a particularly interesting case since it has been subject to a considerable decentralization process with wider responsibilities devolved to regional governments. Therefore, great variability exists in the way tariffs are used, as Regions have settled them in accordance with the characteristics of health care providers. An empirical analysis of the Italian hospital system is carried out using data from the National Program for Outcome Assessment on mortality and readmissions for Acute Myocardial Infarction (AMI), Congestive Heart Failure (CHF), stroke and Chronic Obstructive Pulmonary Diseases (COPD) in the years 2009-2010. The results show that hospitals operating in Regions where prospective payments are used more extensively are generally associated with better quality of care.
    No preview · Article · Jul 2013 · Health Policy
  • Source
    • "A higher DSH value indicates greater socioeconomic disadvantage . The DSH has been used in similar research to identify the gradient of hospital disadvantage ( Jha , Orav , and Epstein 2010 ) . We classified hospitals into quartiles based on their DSH in the first year of the HQID . "
    [Show abstract] [Hide abstract]
    ABSTRACT: The Medicare and Premier Inc. Hospital Quality Incentive Demonstration (HQID), a hospital-based pay-for-performance program, changed its incentive design from one rewarding only high performance (Phase 1) to another rewarding high performance, moderate performance, and improvement (Phase 2). We tested whether this design change reduced the gap in incentive payments among hospitals treating patients across the gradient of socioeconomic disadvantage. To estimate incentive payments in both phases, we used data from the Premier Inc. website and from Medicare Provider Analysis and Review files. We used data from the American Hospital Association Annual Survey and Centers for Medicare and Medicaid Services Impact File to identify hospital characteristics. Hospitals were divided into quartiles based on their Disproportionate Share Index (DSH), from lowest disadvantage (Quartile 1) to highest disadvantage (Quartile 4). In both phases of the HQID, we tested for differences across the DSH quartiles for three outcomes: (1) receipt of any incentive payments; (2) total incentive payments; and (3) incentive payments per discharge. For each of the study outcomes, we performed a hospital-level difference-in-differences analysis to test whether the gap between Quartile 1 and the other quartiles decreased from Phase 1 to Phase 2. In Phase 1, there were significant gaps across the DSH quartiles for the receipt of any payment and for payment per discharge. In Phase 2, the gap was not significant for the receipt of any payment, but it remained significant for payment per discharge. For the receipt of any incentive payment, difference-in-difference estimates showed significant reductions in the gap between Quartile 1 and the other quartiles (Quartile 2, 17.5 percentage points [p < .05]; Quartile 3, 18.1 percentage points [p < .01]; Quartile 4, 28.3 percentage points [p < .01]). For payments per discharge, the gap was also significantly reduced between Quartile 1 and the other quartiles (Quartile 2, $14.92 per discharge [p < .10]; Quartile 3, $17.34 per discharge [p < .05]; Quartile 4, $21.31 per discharge [p < .01]). There were no significant reductions in the gap for total payments. The design change in the HQID reduced the disparity in the receipt of any incentive payment and for incentive payments per discharge between hospitals caring for the most and least socioeconomically disadvantaged patient populations.
    Full-text · Article · Mar 2012 · Health Services Research
  • Source

    Full-text · Article · Mar 2011 · Annals of internal medicine
Show more