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Hospital Officials Enthusiastic About Pay for Performance

Few hospitals are participating in P4P, but many report a readiness to do so. They see it as a way to increase income and improve quality.

There is a huge gap between the number of hospitals whose senior executives are willing and ready to participate in pay-for-performance (P4P) programs and those who are actually doing so.

This finding came from a telephone survey of senior executives and quality-improvement directors at the nation's hospitals conducted by Mathematica Policy Research Inc. in summer 2005.

The survey found that while 93 percent of the senior executives strongly or somewhat supported participation in P4P, only about 20 percent said that their hospitals were participating in P4P at the time.

Mathematica, a nonpartisan firm, conducts policy research and surveys for federal and state governments, foundations, and private-sector clients.

In 2000 Mathematica selected a stratified random sample based on participation in the Centers for Medicare and Medicaid Services (CMS) Premier Hospital Quality Incentive Demonstration; accreditation by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO); and hospital size—small (1-99 beds), medium (100-299 beds), and large (300 or more beds).

Respondents included 653 quality-improvement (QI) directors and 638 senior executives at JCAHO-accredited and non-accredited hospitals of various sizes. The response rate was 89 percent for senior hospital executives and 95 percent for QI directors.

The survey was funded by CMS to ascertain the status of P4P at the nation's hospitals. The agency has initiated a P4P demonstration project for physicians and hospitals treating Medicare patients and has indicated its intention—despite trepidation or outright resistance by physician groups—to move toward a system of pay for performance throughout the Medicare program.

Only 20 percent of hospitals were participating in these types of programs at the time of the survey, with large hospitals accredited by the JCAHO more likely than other types of hospitals to have experience with P4P. Less than 6 percent of hospitals took part in more than one P4P program.

Nonetheless, 93 percent of survey respondents supported moving forward with a P4P program over the next few years. Support was strong among both hospitals that participated in P4P and those that did not, according to Mathematica.

Lead author Suzanne Felt-Lisk told Psychiatric News that respondents were not asked why they were not participating.

"My sense is that it is related to how aggressive payers have been thus far [about implementing P4P]," she said. "They haven't been that aggressive yet about getting hospitals on board with these programs. It has to do with the availability and supply of P4P programs rather than the willingness of hospitals to take them on."

Felt-Lisk added that she was not surprised by the finding that only 20 percent of hospitals were participating in P4P. "Probably one of the most important findings is that it is going to take a while for hospitals to get the experience to participate in a fully developed pay-for-performance program."

In response to an open-ended question about the most important reason they participated in P4P, hospital executives and QI directors at participating hospitals said that they viewed the programs as an opportunity for reaping financial benefits for the hospital or for stimulating quality improvement.

"Selecting the right measures will be a critical element of future success in the pay-for-performance arena," according to Mathematica. "In choosing measures, CMS will need to strike a balance between including a large number of measures to estimate hospital quality accurately in important clinical areas and overwhelming hospitals with new measures they have not been reporting."

"Pay for Performance: Are Hospitals Ready and Willing?" is based on a study funded by CMS through the Delmarva Foundation. The brief is posted at <www.mathematica-mpr.com/publications/pdfs/P4P.pdf>.

Related Article:

Escalating Health Care Costs Threaten Nation's Future

Mark Moran
Psychiatr News 2006 41: 6. [Full Text]

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