Home E-Weekly April 17, 2012

Will Pay-for-Performance Work?

Published: April 16, 2012

Medicare's pay-for-performance incentives do not have a significant long-term impact on patient outcomes, according to a New England Journal of Medicine study.

Researchers at Harvard Business School compared 30-day mortality rates for more than 6 million patients treated between 2004 and 2009 at hospitals identified as pay-for-performance test sites, and compared the outcomes data with hospitals that did not receive incentives.

Pay-for-performance had no positive effect on mortality rates, according to the study, even for patients being treated for acute myocardial infarction or undergoing coronary bypass graft surgery, 2 conditions specifically incentivized by Medicare for improvement. Similar outcomes were observed in poor-performing hospitals, which researchers say had the most to gain from participating in the pay-for-performance program.

With CMS set to expand pay-for-performance's reach this year, say the researchers, collecting data about pay-for-performance's long-term impact is necessary because participating facilities have to change their underlying approach to patient care, the benefits of which could take years to realize.

"Our findings suggest that both the size of the incentives and the targets matter," says Ashish Jha, the study's lead author and associate professor of health policy and management at Harvard. "We need to better align financial incentives with delivery of high-quality care."

Daniel Cook

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