Quality and financial outcomes from gainsharing for inpatient admissions: A three‐year experience

Abstract

BACKGROUND:Gainsharing is a way to provide incentives to physicians to decrease hospital costs without compromising quality.METHODS:A pay‐for‐performance program was instituted over a three‐year period from July 2006 to June 2009. Baseline length of stay (LOS) and case costs were developed during the year prior to the inception of the program. Best practice norms (BPNs) were established at the top 25th percentile of physicians for each all patient refined (APR)‐diagnosis related group (DRG). Hospital costs were analyzed in several areas, including operating room charge (OR), supplies and implants, nursing and per‐diem room costs. Payments were based upon case level performance compared to BPN's and the physician's historic performance. Eligible cases included commercial insurance only for the first 2 years but Medicare cases were included after October 2008 resulting from a Centers for Medicare and Medicaid Services (CMS)‐approved demonstration project. Payments to physicians required meeting quality thresholds, including chart completion, and compliance with core measures.RESULTS:A total of 184 (54%) physicians enrolled into the program. There was a $25.1 million reduction in hospital costs during the 3 years ($16 million from participating and $9.1 million from non‐participating physicians, P < 0.01). Most cost reductions were attributed to reduced LOS and reductions in medical supply costs. Total physician payouts were over $2 million (average $1,866 per quarter). Delinquent medical records decreased from an average of 43% in the second quarter 2006 to 30% (P < 0.0001) in the second quarter 2009. Quality measures improved during the study period but not by a statistical significance.CONCLUSIONS:Gainsharing provided an incentive for physicians to reduce hospital costs while maintaining hospital quality. Journal of Hospital Medicine 2010. © 2010 Society of Hospital Medicine.

Bundled Payments for Care Improvement Initiative: The Next Evolution of Payment Formulations

“…The AAOS encouraged orthopaedic surgeons to use objective valid evidence-based measures to evaluate technology. In summary, the AAOS stated that gain-sharing can create conflicts of interest for orthopaedic surgeons and conflicts must be resolved in favor of patients [11].…”

“…In most healthcare financing schemes, physicians have no incentive to control hospital costs. One rationale for implementing gain-sharing programs is to create incentives for physicians to help control hospital costs [11,12].…”

“…In 2010, gain-sharing demonstrations were included in the Patient Protection and Affordable Care Act (PPACA). Gain-sharing programs were allowed to create savings for hospitals if participation in the programs was voluntary and not coerced; if quality, efficiency and patient satisfaction were measured and methods for improvement were included; and if the program was completely transparent to all stakeholders [11,13].…”

Evaluating the effectiveness of a gainsharing programme for labour productivity improvement

“…According to Leitman et al (2010) in the private health sector in the USA, a pay-for performance programme introduced at a large private hospital between July 2006 and June 2009 resulted in a $25 million reduction in costs. The gainsharing programme proved an incentive for medical staff to reduce hospital costs while maintaining quality care.…”

The Cost-Effectiveness of Pay-for-Performance

“…[5][6][7][8][9][10][11][12] This disagreement in evidence has been attributed to varying levels of methodological rigor. Indeed, the deceptively simple ratio that underpins value health involves a multidimensionality that makes measuring its true impact on cost-effectiveness far from transparent.…”