Pay-for-Performance Failure - Another Promising Idea Is Upended

Submitted by jonpearce on Thu, 2012-03-29 22:08

This week the New England Journal of Medicine published an article concluding that yet another Medicare experiment in cost or quality control was ineffective.  This article described the Medicare Premier Hospital Quality Incentive Demonstration, in which hospitals could receive an increase in their Medicare payments for meeting certain quality metrics.  The article did not describe the payments that were made to the participating hospitals, but presumably some hospitals scored well on the quality metrics and received performance-based increases in payment.

Apparently the quality metrics used in the payment methodology don't actually improve mortality, however.  NEJM's summary conclusion was "We found no evidence that the largest hospital-based pay-for-performance program led to a decrease in 30-day mortality. Expectations of improved outcomes for programs modeled after Premier HQID should therefore remain modest."

This somewhat dismal report follows another recent Health Affairs article described in this Single Tracks blog that showed that physician having access to electronic health records ordered more, not fewer, diagnostic tests.  And that article followed up on yet another CBO report described here showing the lack of effectiveness of many of the CMS cost and quality initiatives.  Health Affairs also weighed in with yet another article described here showing the lack of effectiveness of many programs designed to reduce readmission rates.

These results suggest that hospitals and other providers should be skeptical of the "next new thing" that promises to increase quality and reduce cost.  While anecdotal stories continue to show success in some areas, the overall response to many of these initiatives seems to be minimal.

Our purpose in reporting these results isn't to dampen your enthusiasm for finding ways to improve the healthcare system, but it is to inject a strong note of skepticism towards promising but unproven methodologies.  Just as "evidence-based medicine" is being proposed as the right path towards medicare treatment (although that may be yet another promising failure), so should "evidence-based health management" be the watch-phrase in evaluating new healthcare processes.