Healthcare News & Insights

Do hospital performance rewards cut death rates?

Many people think performance rewards are the answer to better treatment outcomes and lower death rates, but are they really?

A recent study published in the New England Journal of Medicine says no.

The study spanned six years and looked at the effect the Medicare Premier Hospital Quality Incentive Demonstration had on patient outcomes. The participating facilities were assessed on 33 quality measures and received higher or lower Medicare payments based on their performances.

What the study by researchers at the Harvard School of Public Health found was following quality measures didn’t decrease 30-day mortality rates.


One reason is because many of the quality measures in the study are process-focused, not outcome related. An example of a process measure is how many heart attack patients are given a beta-blocker upon arrival at the hospital.

From 2004 through 2009, the study compared 30-day mortality rates for patients with heart attack, congestive heart failure, pneumonia and coronary-artery bypass surgery.

When researchers compared participants in the demonstration project to other facilities that publicly report their performance on quality measures, they found little evidence to support that the study group’s 30-day mortality rates were better.

It’s not that pay-for-performance doesn’t work, note the researchers. For example, Aurora Health Care System’s hospitals received $1.9 million in additional Medicare payment for achieving specific quality benchmarks during the program. And it went from a “below-average performer” at the beginning of the study to the “top-performing health system” at the end of the study.

Most hospital executives would agree it makes a lot more sense to pay more for better care than to pay more for more care that’s not effective. The challenge is figuring out how to measure better care that leads to better outcomes, because better outcomes means shorter hospital stays and less money spent.

Measuring outcomes is more difficult than measuring processes. But since the start of the study, healthcare quality measures have evolved and increasingly are focused on outcomes.

What do you think about quality measures? Are they the answer to providing better care and lower healthcare costs? Share your thoughts below.



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