Does winning a pay-for-performance bonus improve subsequent quality performance? Evidence from the Hospital Quality Incentive Demonstration

Evidence on the effectiveness of value-based payment schemes implemented in a hospital setting: A systematic review

Value-based payment is among payment models rewarding health care providers for achieving pre-defined targets of quality or efficiency measures of care. This paper aims to identify the evidence of the effectiveness of value-based payment schemes implemented in hospital settings. A systematic review of databases for studies published from 2000 to 2022 that evaluated VBP programs was conducted. We searched four databases including PubMed, Scopus, Embase, and Web of Sciences in July 2023. Studies were screened and assessed for eligibility. A thematic analysis approach was used to synthesize and summarize the findings. Overall, 29 articles looking into the VBP programs have been included. Most articles describe the effects on the outcome of care (n = 18). The findings of a great deal of evidence in this field show that VBP is not correlated with some outcome measures including hospital-acquired conditions, 30-day mortality, mortality trends, as well as mortality among patients with acute myocardial infarction or heart failure. Only three of 12 studies have revealed a positive relationship between a P4P program and efficiency. Seven studies from the United States (US) found no evidence or mixed findings on the effects of P4P on efficiency. The magnitude of the effects of VBP on healthcare quality, patient experience, and costs has often been small and non-significant. The unintended negative impact of incentives in value-based payment on hospitals should be tackled when adopting policies and decisions.

The effect of patient quality measurements and HCAHPS patient satisfaction on hospital reimbursements

BACKGROUND: The Centers of Medicare & Medicaid Services (CMS) links hospital reimbursements to quality metrics. Likewise, the Hospital Value-Based Purchasing (VBP) program offers financial incentives to acute-care hospitals based on performance improvements on several quality measures included in the national Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. A research gap exists with regard to assessing the effectiveness of VBP incentives on improving the patient’s quality of care. OBJECTIVE: This study is to determine whether hospitals which reported better patient quality metrics and lower frequency of pressure sores received higher reimbursements. METHODS: The data were retrieved from the CMS Care Compare website utilizing matched data from 2297 US hospitals. Information on HCAHPS, the VBP Program in Patient Safety Index, and Reimbursements was obtained for this study. Partial Least Square (PLS) was utilized thru SmartPLS 3.0 to test the hypotheses. RESULTS: The results did not reveal any financial penalties when hospitals reported lower patient quality outcomes and increased numbers of pressure sores. However, lower patient quality measures were associated with lower patient satisfaction. Controversially, lower patient satisfaction scores were associated with higher reimbursement rates overall. CONCLUSIONS: The main contribution of this study reveals that the effectiveness of value-based reimbursements and the concept of continuous improvement is constrained due to the lack of unified measurement objectives across US healthcare institutions.

Public Reporting on the Quality of Care in Patients with Acute Myocardial Infarction: The Korean Experience

Public reporting is a way to promote quality of healthcare. However, evidence supporting improved quality of care using public reporting in patients with acute myocardial infarction (AMI) is disputed. This study aims to describe the impact of public reporting of AMI care on hospital quality improvement in Korea. Patients with AMI admitted to the emergency room with ICD-10 codes of I21.0 to I21.9 as the primary or secondary diagnosis were identified from the national health insurance claims data (2007-2012). Between 2007 and 2012, 43,240/83,378 (51.9%) patients manifested ST segment elevation myocardial infarction (STEMI). Timely reperfusion rate increased (β = 2.78, p = 0.001). The mortality rate of STEMI patients was not changed (β = -0.0098, p = 0.384) but that of NSTEMI patients decreased (β = -0.465, p = 0.001). Public reporting has a substantial impact on the process indicators of AMI in Korea because of the increased reperfusion rate. However, the outcome indicators such as mortality did not significantly change, suggesting that public reporting did not necessarily improve the quality of care.

Performance Pay in Hospitals: An Experiment on Bonus-Malus Incentives

Recent policy reforms in Germany require the introduction of a performance pay component with bonus–malus incentives in the inpatient care sector. We conduct a controlled online experiment with real hospital physicians from public hospitals and medical students in Germany, in which we investigate the effects of introducing a performance pay component with bonus–malus incentives to a simplified version of the German Diagnosis Related Groups (DRG) system using a sequential design with stylized routine cases. In both parts, participants choose between the patient optimal and profit maximizing treatment option for the same eight stylized routine cases. We find that the introduction of bonus–malus incentives only statistically significantly increases hospital physicians’ proportion of patient optimal choices for cases with high monetary baseline DRG incentives to choose the profit maximizing option. Medical students behave qualitatively similar. However, they are statistically significantly less patient oriented than real hospital physicians, and statistically significantly increase their patient optimal decisions with the introduction of bonus–malus incentives in all stylized routine cases. Overall, our results indicate that whether the introduction of a performance pay component with bonus–malus incentives to the (German) DRG system has a positive effect on the quality of care or not particularly depends on the monetary incentives implemented in the DRG system as well as the type of participants and their initial level of patient orientation.

Early Performance of Hospital Value-based Purchasing Program in Medicare: A Systematic Review

BACKGROUND

Under the Affordable Care Act, the Centers for Medicare and Medicaid Services has greatly expanded inpatient fee-for-value programs including the Hospital Value-based Purchasing (HVBP) program. Existing evidence from the HVBP program is mixed. There is a need for a systematic review of the HVBP program to inform discussions on how to improve the program's effectiveness.

OBJECTIVE

To review and summarize studies that evaluated the HVBP program's impact on clinical processes, patient satisfaction, costs and outcomes, or assessed hospital characteristics associated with performance on the program.

DESIGN

We searched the MEDLINE/PubMed, Scopus, ProQuest database for literature published between January 2013 and July 2019 using the Preferred Reporting Items for Systematic Reviews and Meta-Analysis guidelines.

RESULTS

Of 988 studies reviewed, 33 studies that met the selection criteria were included. A small group of studies (n=7) evaluated the impact of the HVBP program, and no impact on processes or patient outcomes was reported. None of the included studies evaluated the effect of HVBP program on health care costs. Other studies (n=28) evaluated the hospital characteristics associated with HVBP performance, suggesting that safety-net hospitals reportedly performed worse on several quality and cost measures. Other hospital characteristics' associations with performance were unclear.

CONCLUSIONS

Our findings suggest that the current HVBP does not lead to meaningful improvements in quality of care or patient outcomes and may negatively affect safety-net hospitals. More rigorous and comprehensive adjustment is needed for more valid hospital comparisons.

Can Pay-for Performance Incentive Levels be Determined Using a Cost-Effectiveness Framework?

BACKGROUND

Healthcare payers in the United States are increasingly tying provider payments to quality and value using pay-for-performance policies. Cost-effectiveness analysis quantifies value in healthcare but is not currently used to design or prioritize pay-for-performance strategies or metrics. Acute ischemic stroke care provides a useful application to demonstrate how simulation modeling can be used to determine cost-effective levels of financial incentives used in pay-for-performance policies and associated challenges with this approach.

METHODS AND RESULTS

Our framework requires a simulation model that can estimate quality-adjusted life years and costs resulting from improvements in a quality metric. A monetary level of incentives can then be back-calculated using the lifetime discounted quality-adjusted life year (which includes effectiveness of quality improvement) and cost (which includes incentive payments and cost offsets from quality improvements) outputs from the model. We applied this framework to an acute ischemic stroke microsimulation model to calculate the difference in population-level net monetary benefit (willingness-to-pay of $50 000 to $150 000/quality-adjusted life year) accrued under current Medicare policy (stroke payment not adjusted for performance) compared with various hypothetical pay-for-performance policies. Performance measurement was based on time-to-thrombolytic treatment with tPA (tissue-type plasminogen activator). Compared with current payment, equivalent population-level net monetary benefit was achieved in pay-for-performance policies with 10-minute door-to-needle time reductions (5057 more acute ischemic stroke cases/y in the 0-3-hour window) incentivized by increasing tPA payment by as much as 18% to 44% depending on willingness-to-pay for health.

CONCLUSIONS

Cost-effectiveness modeling can be used to determine the upper bound of financial incentives used in pay-for-performance policies, although currently, this approach is limited due to data requirements and modeling assumptions. For tPA payments in acute ischemic stroke, our model-based results suggest financial incentives leading to a 10-minute decrease in door-to-needle time should be implemented but not exceed 18% to 44% of current tPA payment. In general, the optimal level of financial incentives will depend on willingness-to-pay for health and other modeling assumptions around parameter uncertainty and the relationship between quality improvements and long-run quality-adjusted life expectancy and costs.

How are medical groups identified as high-performing? The effect of different approaches to classification of performance

BACKGROUND

Payers and policy makers across the international healthcare market are increasingly using publicly available summary measures to designate providers as "high-performing", but no consistently-applied approach exists to identifying high performers. This paper uses publicly available data to examine how different classification approaches influence which providers are designated as "high-performers".

METHODS

We conducted a quantitative analysis of cross-sectional publicly-available performance data in the U.S. We used 2014 Minnesota Community Measurement data from 58 medical groups to classify performance across 4 domains: quality (two process measures of cancer screening and 2 composite measures of chronic disease management), total cost of care, access (a composite CAHPS measure), and patient experience (3 CAHPS measures). We classified medical groups based on performance using either relative thresholds or absolute values of performance on all included measures.

RESULTS

Using relative thresholds, none of the 58 medical groups achieved performance in the top 25% or 35% in all 4 performance domains. A relative threshold of 40% was needed before one group was classified as high-performing in all 4 domains. Using absolute threshold values, two medical groups were classified as high-performing across all 4 domains. In both approaches, designating "high performance" using fewer domains led to more groups designated as high-performers, though there was little to moderate concordance across identified "high-performing" groups.

CONCLUSIONS

Classification of medical groups as high performing is sensitive to the domains of performance included, the classification approach, and choice of threshold. With increasing focus on achieving high performance in healthcare delivery, the absence of a consistently-applied approach to identify high performers impedes efforts to reliably compare, select and reward high-performing providers.

Pay for performance for hospitals

BACKGROUND

Pay-for-Performance (P4P) is a payment model that rewards health care providers for meeting pre-defined targets for quality indicators or efficacy parameters to increase the quality or efficacy of care.

OBJECTIVES

Our objective was to assess the impact of P4P for in-hospital delivered health care on the quality of care, resource use and equity. Our objective was not only to answer the question whether P4P works in general (simple perspective) but to provide a comprehensive and detailed overview of P4P with a focus on analyzing the intervention components, the context factors and their interrelation (more complex perspective).

SEARCH METHODS

We searched CENTRAL, MEDLINE, Embase, three other databases and two trial registers on 27 June 2018. In addition, we searched conference proceedings, gray literature and web pages of relevant health care institutions, contacted experts in the field, conducted cited reference searches and performed cross-checks of included references and systematic reviews on the same topic.

SELECTION CRITERIA

We included randomized trials, cluster randomized trials, non-randomized clustered trials, controlled before-after studies, interrupted time series and repeated measures studies that analyzed hospitals, hospital units or groups of hospitals and that compared any kind of P4P to a basic payment scheme (e.g. capitation) without P4P. Studies had to analyze at least one of the following outcomes to be eligible: patient outcomes; quality of care; utilization, coverage or access; resource use, costs and cost shifting; healthcare provider outcomes; equity; adverse effects or harms.

DATA COLLECTION AND ANALYSIS

Two review authors independently screened all citations for inclusion, extracted study data and assessed risk of bias for each included study. Study characteristics were extracted by one reviewer and verified by a second.We did not perform meta-analysis because the included studies were too heterogenous regarding hospital characteristics, the design of the P4P programs and study design. Instead we present a structured narrative synthesis considering the complexity as well as the context/setting of the intervention. We assessed the certainty of evidence using the GRADE approach and present the results narratively in 'Summary of findings' tables.

MAIN RESULTS

We included 27 studies (20 CBA, 7 ITS) on six different P4P programs. Studies analyzed between 10 and 4267 centers. All P4P programs targeted acute or emergency physical conditions and compared a capitation-based payment scheme without P4P to the same capitation-based payment scheme combined with a P4P add-on. Two P4P program used rewards or penalties; one used first rewards and than penalties; two used penalties only and one used rewards only. Four P4P programs were established and evaluated in the USA, one in England and one in France.Most studies showed no difference or a very small effect in favor of the P4P program. The impact of each P4P program was as follows.Premier Hospital Quality Incentive Demonstration Program: It is uncertain whether this program, which used rewards for some hospitals and penalties for others, has an impact on mortality, adverse clinical events, quality of care, equity or resource use as the certainty of the evidence was very low.Value-Based Purchasing Program: It is uncertain whether this program, which used rewards for some hospitals and penalties for others, has an impact on mortality, adverse clinical events or quality of care as the certainty of the evidence was very low. Equity and resource use outcomes were not reported in the studies, which evaluated this program.Non-payment for Hospital-Acquired Conditions Program: It is uncertain whether this penalty-based program has an impact on adverse clinical events as the certainty of the evidence was very low. Mortality, quality of care, equity and resource use outcomes were not reported in the studies, which evaluated this program.Hospital Readmissions Reduction Program: None of the studies that examined this penalty-based program reported mortality, adverse clinical events, quality of care (process quality score), equity or resource use outcomes.Advancing Quality Program: It is uncertain whether this reward-/penalty-based program has an impact on mortality as the certainty of the evidence was very low. Adverse clinical events, quality of care, equity and resource use outcomes were not reported in any study.Financial Incentive to Quality Improvement Program: It is uncertain whether this reward-based program has an impact on quality of care, as the certainty of the evidence was very low. Mortality, adverse clinical events, equity and resource use outcomes were not reported in any study.Subgroup analysis (analysis of modifying design and context factors)Analysis of P4P design factors provides some hints that non-payments compared to additional payments and payments for quality attainment (e.g. falling below specified mortality threshold) compared to quality improvement (e.g. reduction of mortality by specified percent points within one year) may have a stronger impact on performance.

AUTHORS' CONCLUSIONS

It is uncertain whether P4P, compared to capitation-based payments without P4P for hospitals, has an impact on patient outcomes, quality of care, equity or resource use as the certainty of the evidence was very low (or we found no studies on the outcome) for all P4P programs. The effects on patient outcomes of P4P in hospitals were at most small, regardless of design factors and context/setting. It seems that with additional payments only small short-term but non-sustainable effects can be achieved. Non-payments seem to be slightly more effective than bonuses and payments for quality attainment seem to be slightly more effective than payments for quality improvement.

Incentives in a public addiction treatment system: Effects on waiting time and selection

Program-level financial incentives are used by some payers as a tool to improve quality of substance use treatment. However, evidence of effectiveness is mixed and performance contracts may have unintended consequences such as creating barriers for more challenging clients who are less likely to meet benchmarks. This study investigates the impact of a performance contract on waiting time for substance use treatment and client selection. Admission and discharge data from publicly funded Maine outpatient (OP) and intensive outpatient (IOP) substance use treatment programs (N = 38,932 clients) were used. In a quasi-experimental pre-post design, pre-period (FY 2005-2007) admission data from incentivized (IC) and non-incentivized (non-IC) programs were compared to post-period (FY 2008-2012) using propensity score matching and multivariate difference-in-difference regression. Dependent variables were waiting time (incentivized) and client selection (severity: history of mental disorders and substance use severity, not incentivized). Despite financial incentives designed to reduce waiting time for substance use treatment among state-funded outpatient programs, average waiting time for treatment increased in the post period for both IC and non-IC groups, as did client severity. There were no significant differences in waiting time between IC and non-IC groups over time. Increases in client severity over time, with no group differences, indicate that programs did not restrict access for more challenging clients. Adequate funding and other approaches to improve quality may be beneficial.

Comprehensive healthcare resource use among newly diagnosed congestive heart failure

BACKGROUND

Congestive heart failure (CHF) is among the most common causes of hospital admissions and readmissions in the Western world. However, the burden of ambulatory care has not been as well investigated. The objective of this study was to assess the relative burden and direct medical costs of CHF including inpatient and outpatient care.

METHODS

We used longitudinal clinical data from a two-million member health organization in Israel (Maccabi Healthcare Services) to identify adults with newly diagnosed CHF between January 2006 and December 2012, either in the in- or outpatient setting. Adults without CHF were age- and sex-matched to CHF patients and healthcare utilization and all modes of healthcare costs were compared among them, excluding those in their last year of life.

RESULTS

The burden posed by 6592 CHF patients was significantly (p < 0.001) larger than that of 32,960 matched controls. CHF patients had significantly higher rates of baseline comorbidity and healthcare utilization compared to non-CHF controls. This was evident in all categories of healthcare services and expenses, including in- and outpatient visits, laboratory expenses, medication costs, among younger and older, men and women. Among those who incurred any healthcare costs, younger (45-64y) and older (65 + y) subjects with CHF were observed to have about 3.25 (95% CI: 2.96-3.56) and 2.08 (95% CI: 1.99-2.17) times the healthcare costs, respectively, compared to subjects without CHF after adjusting for patient characteristics.

CONCLUSION

CHF is associated with an overall two- to three-fold higher cost of healthcare services depending on patient age, accounting for over half of all healthcare costs incurred by elderly CHF patients, and more than two-thirds of all costs among younger CHF patients. Observations of the large burden posed on one of the youngest societies in the developed world are profound, implicative of great opportunities to control the costs of CHF. Further research to understand how resource use impacts health outcomes and quality of care is warranted.

Impact assessment of a pay-for-performance program on breast cancer screening in France using micro data

BACKGROUND

A voluntary-based pay-for-performance (P4P) program (the CAPI) aimed at general practitioners (GPs) was implemented in France in 2009. The program targeted prevention practices, including breast cancer screening, by offering a maximal amount of €245 for achieving a target screening rate among eligible women enrolled with the GP.

OBJECTIVE

Our objective was to evaluate the impact of the French P4P program (CAPI) on the early detection of breast cancer among women between 50 and 74 years old.

METHODS

Based on an administrative database of 50,752 women aged 50-74 years followed between 2007 and 2011, we estimated a difference-in-difference model of breast cancer screening uptake as a function of visit to a CAPI signatory referral GP, while controlling for both supply-side and demand-side determinants (e.g., sociodemographics, health and healthcare use).

RESULTS

Breast cancer screening rates have not changed significantly since the P4P program implementation. Overall, visiting a CAPI signatory referral GP at least once in the pre-CAPI period increased the probability of undergoing breast cancer screening by 1.38 % [95 % CI (0.41-2.35 %)], but the effect was not significantly different following the implementation of the contract.

CONCLUSION

The French P4P program had a nonsignificant impact on breast cancer screening uptake. This result may reflect the fact that the low-powered incentives implemented in France through the CAPI might not provide sufficient leverage to generate better practices, thus inviting regulators to seek additional tools beyond P4P in the field of prevention and screening.

Introducing Value-Based Purchasing into TRICARE Reform

TRICARE, the health benefits program created for beneficiaries of the U.S. Department of Defense, covers health care provided in military treatment facilities and by civilian providers. Congress is now considering how to update TRICARE, which was first developed in the 1980s drawing on managed care concepts from civilian health plans. This article places TRICARE's current managed care strategy in historical context and describes recent innovations by private insurers and Medicare intended to enhance the value---cost and quality---of the care they purchase for their members. With this movement toward value-based purchasing as background, the authors evaluate two existing proposals for reform and describe an alternative approach that blends the existing proposals.

QUEST®: A Data-Driven Collaboration to Improve Quality, Efficiency, Safety, and Transparency in Acute Care

BACKGROUND

In 2008 Premier (Premier, Inc., Charlotte, North Carolina) began its Quality, Efficiency, and Safety with Transparency (QUEST®) collaborative, which is an acute health care organization program focused on improving quality and reducing patient harm.

METHODS

Retrospective performance data for QUEST hospitals were used to establish trends from the third quarter (Q3; July–September) of 2006 through Q3 2015. The study population included past and present members of the QUEST collaborative (N = 356), with each participating hospital considered a member. The QUEST program engages with member hospitals through a routine-coaching structure, sprints, minicollaboratives, and face-to-face meetings.

RESULTS

Cost and efficiency data showed reductions in adjusted cost per discharge for hospitals between Q3 2013 (mean, $8,296; median, $8,459) and Q3 2015 (mean, $8,217; median, $7,895). Evidence-based care (EBC) measures showed improvement from baseline (Q3 2006; mean, 77%; median, 79%) to Q3 2015 (mean, 95%; median, 96%). Observed-to-expected (O/E) mortality improved from 1% to 22% better-than-expected outcomes on average. The QUEST safety harm composite score showed moderate reduction from Q1 2009 to Q3 2015, as did the O/E readmission rates--from Q1 2010 to Q3 2015--with improvement from a 5% to an 8% better-than-expected score.

CONCLUSION

Quantitative and qualitative evaluation of QUEST collaborative hospitals indicated that for the 2006-2015 period, QUEST facilities reduced cost per discharge, improved adherence with evidence-based practice, reduced safety harm composite score, improved patient experience, and reduced unplanned readmissions.

A Note on the Comparative Statics of Pay-for-Performance in Health Care

Pay-for-performance (P4P) is a widely implemented quality improvement strategy in health care that has generated much enthusiasm, but only limited empirical evidence to support its effectiveness. Researchers have speculated that flawed program designs or weak financial incentives may be to blame, but the reason for P4P's limited success may be more fundamental. When P4P rewards multiple services, it creates a special case of the well-known multitasking problem, where incentives to increase some rewarded activities are blunted by countervailing incentives to focus on other rewarded activities: these incentives may cancel each other out with little net effect on quality. This paper analyzes the comparative statics of a P4P model to show that when P4P rewards multiple services in a setting of multitasking and joint production, the change in both rewarded and unrewarded services is generally ambiguous. This result contrasts with the commonly held intuition that P4P should increase rewarded activities.

The Surgical Care Improvement Project Antibiotic Guidelines: Should We Expect More Than Good Intentions?

Since 2006, the Surgical Care Improvement Project (SCIP) has promoted 3 perioperative antibiotic recommendations designed to reduce the incidence of surgical site infections. Despite good evidence for the efficacy of these recommendations, the efforts of SCIP have not measurably improved the rates of surgical site infections. We offer 3 arguments as to why SCIP has fallen short of expectations. We then suggest a reorientation of quality improvement efforts to focus less on reporting, and incentivizing adherence to imperfect metrics, and more on creating local and regional quality collaboratives to educate clinicians about how to improve practice. Ultimately, successful quality improvement projects are behavioral interventions that will only succeed to the degree that they motivate individual clinicians, practicing within a particular context, to do the difficult work of identifying failures and iteratively working toward excellence.

Racial disparities in outcomes after cardiac surgery: the role of hospital quality

Patients from racial and ethnic minorities experience higher mortality after cardiac surgery compared to white patients, both during the early postoperative phase as well as long term. A number of factors likely explain poor outcomes in black and minority patients, which include differences in biology, comorbid health conditions, socioeconomic background, and quality of hospital care. Recent evidence suggests that a major factor underlying excess mortality in these groups is due to their over-representation in low-quality hospitals, where all patients regardless of race have worse outcomes. In this review, we examine the factors underlying racial disparities in outcomes after cardiac surgery, with a primary focus on the role of hospital quality.

Incentivising improvements in health care delivery: a response to Adam Oliver

Financial and reputational incentives are increasingly common components in strategies to performance manage the medical profession. Judging the impacts of incentives is challenging, however, and the science of framework design remains in its infancy. Oliver's taxonomy therefore offers a useful and timely guide to the approaches that are most likely to be successful (and unsuccessful) in the field of health care. The use of incentives to date has focused on process measures and a narrow range of outcomes, a pragmatic approach that has produced some substantial quality gains within the constraints of existing health care systems. Improvement of specific technical aspects of quality may, however, have been achieved at the expense of trust, cooperation and benevolence. Deficits in these indispensible virtues will undermine any attempt to performance manage the medical and allied professions.