Aligning Financial Incentives with Quality of Care in the Hospital Setting

Abstract

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.

Improving the management of non-ST elevation acute coronary syndromes: systematic evaluation of a quality improvement programme E uropean QU ality I mprovement P rogramme for A cute C oronary S yndrome: The EQUIP-ACS project protocol and design

“…The database has a facility to generate online reports which allows centres to assess their progress. The RIKS-HIA data collection tool is a validated web-based system with 10 years of experience [27,28]. All data will be entered in an anonymous manner at the participating centres and transferred in an encrypted format to the main server at UCR, Uppsala where it will be held securely.…”

“…Evidence exists that introducing professional education programmes, care pathways that guide clinical management for common diseases, and audits against guidelines, all improve care [8,10]. There is also evidence that financial incentives can lead to improvements in care, which may take the form of additional payments for achieving pre-defined targets, or as financial losses for failing to do so [27]. In addition, if the overall level of health care funding precludes provision of certain treatments (for example under-provision of coronary revascularisation facilities), this may lead to deficiencies in care that cannot be improved without an increase in health care resources for that particular disease area.…”

Impact of Pay-for-Performance on Efficiency and Effectiveness in Hospitals: A Systematic Review

“…Two studies, both carried out in hospitals showed that P4P programs decreased the length of stay and so improved the efficiency of care [38,54]. Detailed results are presented in Appendix Table 1.…”

“…Two of them which measured patient satisfaction with questionnaire, found small & non-significant effects [38,39] and 1 Cochrane systematic review found inconclusive results [29].…”

Performance contracting and quality improvement in outpatient treatment: Effects on waiting time and length of stay

“…However, there are many different types of incentives, target behaviors and outcomes, and contingencies potentially relevant to healthcare improvement and to date only a few implementations of P4P have been studied (Mehrotra, et al, 2009); and many of those studies are limited to pre-post analyses that fail to control for secular trends (An et al, 2008; J. Berthiaume, Chung, Ryskina, Walsh, & Legorreta, 2006; J.…”