Executive summary - Premiers Performance Pays Study

By Debbie Gardner,2014-06-18 09:41
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Executive summary - Premiers Performance Pays Study

Quality and Cost Trend Analysis

    Using data from Medicare, Premier Pay-for-Performance Project

    Executive Summary - 1/31/08

Hospital quality improving, cost, mortality rate trends declining for participants

    in Medicare pay-for-performance project


    ? Hospital quality continues to improve while patient mortality rates and hospital costs are declining

    among participants in a Centers for Medicare and Medicaid Services (CMS) pay-for-performance (P4P)

    demonstration project, according to a recent Premier healthcare alliance analysis of over 1.1 million

    participant patient records.

    ? According to Premier’s analysis, the broadest of its kind to date, if all hospitals nationally were to

    achieve the three-year cost and mortality improvements found in the Hospital Quality Incentive

    Demonstration (HQID) P4P participants for pneumonia, heart bypass, heart failure, heart attack (acute

    myocardial infarction), and hip and knee replacement patient populations, it could have resulted in:

    o Nearly 70,000 fewer deaths annually;

    o A reduction in hospital costs by as much as $4.5 billion annually.

    ? On average, the median hospital cost per patient for participants in the HQID project declined by over

    $1,000 across the first three years of the project, whereas the median mortality rate decreased by 1.87


    ? The 1.1 million patient records represented in this analysis encompass 8.5 percent of all patients

    nationally within the five noted clinical areas over the three-year timeline of this analysis.

Cost Improvement

     Mortality Improvement

    Clinical Area Improvement

    Clinical Area Improvement AMI $1,599

    AMI 2.27% CABG $1,579

    CABG 0.95% Pneumonia $811

    Pneumonia 2.39% Heart Failure $1,181

    Heart Failure 1.86% Hip Replacement $744

    Average 1.87% Knee Replacement $463 Average $1063

Quality has continued to improve in HQID hospitals

    ? For hospitals participating in the HQID project, the median Composite Quality Score (CQS), a

    combination of clinical quality measures and outcome measures, improved by an average of 17.3

    percent across all clinical areas between the inception of the program in October 2003 through

    June 2007 (15 quarters).

    ? The median Appropriate Care Score (ACS), also referred to as “perfect process score” or “all or

    nothing score”, to designate when a patient receives all possible care measures within a clinical

    area, improved by an average of 52.6 percent across all clinical areas between the inception of the

    program in October 2003 through June 2007 (15 quarters).

    ? When compared to non-participating hospitals, the quality score of hospitals in the HQID project

    on 19 publicly reported quality indicators is 6.5 percent higher, indicating that performance

    incentives are effective at improving quality of care. HQID hospitals also started at a lower

    performance level.

? In addition, hospitals participating in the HQID project have, over the first two years of the project:

    o Saved the lives of nearly 1,300 heart-attack patients.

    o Provided more than 150,000 additional treatments that met the highest quality patient care


About the HQID Project

    ? The analysis is based on data from hospitals in the project with the Centers for Medicare and Medicaid

    Services (CMS).

    ? Through that project, Premier collects a set of more than 30 evidence-based clinical quality measures

    from over 250 hospitals across the country.

    ? The quality measures were developed by government and private organizations (for more information on

    the indicators, go to: For instance, the measures for pneumonia are as follows:

    1. Oxygenation assessment

    2. Pneumococcal vaccination

    3. Blood culture before first antibiotic

    4. Adult smoking cessation counseling

    5. Initial antibiotic selection

    6. Initial antibiotic within four hours of hospital arrival

    7. Flu vaccination

    ? The project has been extended by CMS for an additional three years (2007-2009).

Additional Research

    ? A New England Journal of Medicine study found that hospitals in the Premier/CMS pay-for-

    performance project achieved better quality patient care than those hospitals participating in

    Hospital Compare a Health and Human Services-led hospital quality improvement initiative

    without financial incentives.

    ? When compared to the rest of the nation’s hospitals, the quality score of hospitals in the P4P

    project on 18 publicly reported quality indicators is significantly higher, confirming that

    performance incentives are effective at improving quality of care.

Performance Pays Analysis Methodology

    1. Premier Perspective? data was used to calculate quarterly outcomes for the hospitals in the HQID


    2. Analyses excluded hospitals with less than eight cases in a quarter.

    3. All data was severity adjusted using APR-DRGs.

    4. For mortality, risk adjustment was also conducted using the CareScience model which produced similar


    th5. All cost data was renormalized to the 4 quarter 2003 timeframe to adjust for inflation using the U.S.

    Department of Labor Bureau of Labor Statistics Hospital Services Price Index.

    6. Analyzed change in the median hospital value across the twelve quarter timeframe using linear


    7. Premier researchers extrapolated the national implications based on discharge data from the Agency for

    Healthcare Research and Quality (AHRQ) Healthcare Cost and Utilization Project (HCUP) 2005 data.

About Premier Inc., 2006 Malcolm Baldrige National Quality Award recipient

    Serving 1,700 U.S. hospitals and more than 49,000 other healthcare sites, the Premier healthcare alliance and

    its members are transforming healthcare together. Owned by not-for-profit hospitals, Premier operates one of

    the leading healthcare purchasing networks and the nation's most comprehensive repository of hospital

    clinical and financial information. A subsidiary operates one of the nation's largest policy-holder owned,

    hospital professional liability risk-retention groups. A world leader in helping healthcare providers deliver

    dramatic improvements in care, Premier is working with the United Kingdom's National Health Service

    North West and the Centers for Medicare and Medicaid Services to improve hospital performance.

    Headquartered in San Diego, Premier has offices in Charlotte, N.C., Philadelphia, and Washington. For more

    information, visit

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