This article describes the structure, implementation, and early results of a performance-based hospital incentive program designed by a large nonprofit health plan. The Hospital Quality Service and Recognition program, developed by the Hawaii Medical Service Association, was launched in 2001 to reward high-quality medical care at the hospital level. This pay-for-performance program used administrative claims data, survey data, and hospital-reported information to assess hospital performance in risk-adjusted complications and risk-adjusted length of stay (LOS), patient satisfaction, and hospital processes of care measures. Financial incentives were provided to participating hospitals based on their performance on these measures. Preliminary outcomes of the program evaluated over a 4-year period after implementation revealed improvements in aggregated rates of risk-adjusted surgical complications and efficiency of care as evidenced by a substantial decrease in risk-adjusted average LOS for several surgical procedures. Quality improvement was demonstrated in several other program components including emergency department satisfaction. This quality incentive program offers an innovative approach for encouraging delivery of high-quality and service-oriented care in a statewide network of participating hospitals.

Acute epiglottis due to Klebsiella pneumoniae in an adult patient is described. The patient failed to respond to ampicillin and required cephalosporin therapy as well as surgical drainage. In view of increased resistance of Hemophilus influenzae to ampicillin and because of other possible etiologic agents such as Staphylococcus aureus and non-Hemophilus gram-negative rods, consideration should be given for the initial use of one of the recently introduced cephalosporins such as moxalactam or cefamandole in the treatment of adult epiglottitis.

One of the leading questions of our time is whether high-quality care leads to lower health care costs. Using data from Hawaii hospitals, this paper addresses the relationship of overall cost per case to a composite measure of the quality of inpatient care and a 30-day readmission rate. We found that low-cost hospitals tend to have the highest quality but the worst readmission performance. Change in quality and change in cost were also negatively correlated, but not statistically significant. We conclude that high-quality hospital care does not have to cost more, but that the dynamics of the readmission rate differ substantially from other quality dimensions.

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