Hospital pay incentives fail to help patients-study

Wed Mar 28, 2012 5:00pm EDT

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* Mortality rates not better for hospitals with incentives

* Six-year study involved more than 6 million patients

* Results should spark rethink of incentives-researcher

By Lewis Krauskopf

March 28 (Reuters) - A program to pay hospitals bonuses for hitting key performance measures, or dock them if they miss, failed to improve the health outcomes of patients, according to a large, long-term study.

The study could lead to a re-examination of financial incentives in healthcare, as policymakers seek ways to reward results rather than paying doctors and other providers for each service they provide, such as a diagnostic test.

Such an incentive program for hospitals is a key provision of the U.S. healthcare overhaul law that is being challenged this week before the Supreme Court.

The study looked at pay-for-performance incentives similar to those in the law and found no evidence that the program helped more patients live longer. It was published on Wednesday in the New England Journal of Medicine.

"It really didn't move the needle very much on patient outcomes," said Dr. Ashish Jha, a professor at the Harvard School of Public Health and the study's lead author. "There was no evidence that patient outcomes got better under this different financing scheme."

The findings do not necessarily mean the concept of pay-for-performance is invalid, Jha said, but suggests the design of those new incentives should be reconsidered.

"It says to me that we have to go back to the drawing board and try new ways to do pay-for-performance because the current effort is not having the kind of benefit that we really should be seeing," Jha said.

The study assessed the Premier Hospital Quality Incentive Demonstration, a partnership between the U.S. Centers for Medicare and Medicaid Services and a national organization of non-profit hospitals.

The Premier hospitals provided data on 33 performance measures, such as whether patients were given recommended prescriptions or if they received counseling not to smoke. Hospitals that performed in the top 20 percent received 1 or 2 percent bonuses in Medicare payments, while those in the bottom 20 percent were liable for a penalty of 1 percent to 2 percent.

Jha and his fellow researchers compared Medicare data between 252 hospitals participating in the Premier incentive program with 3,363 other hospitals. The study examined mortality rates of more than 6 million patients who had heart attacks, congestive heart failure or pneumonia, or who underwent coronary-artery bypass surgery.

The study found overall mortality rates were similar between the two hospital groups. It also found no improvement when examining the conditions separately.

"The broad pattern here is that there was really no impact on mortality for the Premier demonstration," Jha said.

Health policy experts have speculated that incentives could particularly help poor-performing hospitals, but the study found that while those hospitals improved in the Premier program, the improvements were generally similar to the other hospitals.

While two other studies examining the Premier program had also found no improvement in mortality rates, those studies only examined a three-year period, while the latest study involved a six-year period, according to the study's researchers.

One reason the program has so far come up short, Jha said, could be that hospitals do not have enough financial skin in the game.

"If you have much higher-than-expected mortality rates," he said, "maybe you shouldn't still get 99 cents on the dollar?" (Reporting By Lewis Krauskopf, editing by Dave Zimmerman)

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