Study: Pay for Performance Could Save Lives, Money

Some initial results from the CMS demonstration project of pay-for-performance show that enforcing a higher quality of care for just five major illnesses and procedures could have saved almost 6,000 lives and $1.35 billion in hospital costs in 2004.

Premier, a health alliance of more than 200 nonprofit hospitals and health care systems, recently released results from its pay-for-performance demonstration project with the Centers for Medicare and Medicaid Services.

The new data suggests that implementing pay-for-performance measures could result in saving thousands of lives and hundreds of millions of dollars.

Pay-for-performance requires that health care providers adhere to a certain standard of care in order to be eligible for the highest levels of compensation.

It, therefore, relies upon a substantial data collection and analysis efforts.

In this particular analysis, Premier examined several specific illnesses and procedures including pneumonia, heart bypass, heart attack (acute myocardial infarction), and hip and knee replacement patients.

If all the patients with these conditions received most or all of widely accepted care process in 2004, they are projecting it would have resulted in nearly 5,700 fewer deaths and saved $1.35 billion in hospital costs.

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Additionally, there would have been 8,100 fewer complications, 10,000 fewer readmissions, and 750,000 fewer days in the hospital.

The full study, in PDF form, can be viewed here.

"As the first real-world test of these quality measures, this project represents an important step forward in our understanding of the impact of process improvement on patient outcomes," said Maureen Bisognano, executive vice president and chief operating officer of the Institute for Healthcare Improvement.

Congress has mandated that Medicare develop a plan to implement "value-based purchasing," which ties payment to quality of care and other outcomes starting in the fiscal year 2009.

This project is a test of that model; it collects a set of 33 quality indicators from more than 260 hospitals across the country and links that data to cost and clinical data.

"Our nations current health care payment system pays all hospitals the same way regardless of the quality of care delivered," said U.S. Rep. Sue Myrick, R-N.C.

"These new findings point the way toward a payment system that rewards hospitals for delivering higher quality care."

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