Implementing a pay-for-performance program that was modeled after an incentive initiative in the U.S. resulted in a significant reduction in mortality at 24 hospitals in northwest England, according to a study published Nov. 8 in the New England Journal of Medicine. The U.K. program offered larger bonuses and investments in quality improvements, and these design features may help to explain differences in outcomes.

Between 2003 and 2006, approximately 200 U.S. hospitals participated in the Premier Hospital Quality Incentive Demonstration (HQID), a pay-for-performance demonstration that financially rewarded hospitals for achieving high performance on quality measures for five clinical conditions: heart failure, acute MI, community-acquired pneumonia, CABG and hip and knee replacement. The demonstration showed modest improvements in quality over a two-year period (N Engl J Med 2007;356:486-496).

A follow-up study using long-term data found scant evidence that participation in the pay-for-performance program led to lower 30-day mortality rates. The evaluation of risk-adjusted mortality did not include hip and knee replacement procedures, which had a low mortality rate (N Engl J Med 2012; 366:1606-1615).

Nonetheless, the Centers for Medicare & Medicaid Services (CMS) has initiated a pay-for-performance program that will apply payments withheld through its hospital readmissions reduction program to high performers in a Value-based Purchasing Program. Meanwhile, beginning in 2008 the National Health Service in the U.K. introduced Advancing Quality, a hospital-based pay-for-performance program that is very similar to HQID, in one region in England.

Matt Sutton, PhD, of the Centre for Health Economics at the University in Manchester, and colleagues recognized this as a natural experiment that would allow them to evaluate the effectiveness of the incentive program by comparing the risk-adjusted mortality rates for patients admitted for pneumonia, heart failure or acute MI. They obtained patient data between 2007 and 2010 for 134,435 patients at the 24 hospitals participating in the pay-for-performance initiative as well as 722,139 patients admitted for the conditions at 132 other hospitals in England. The study period spanned 18 months prior to the incentive program and 18 months after its introduction.

The researchers found a significant reduction in mortality, with an absolute reduction of 1.3 percentage points and a relative reduction of 6 percent. The reductions for acute MI and heart failure were more modest than for pneumonia, at 0.6 percentage points each vs. 1.9 percentage points for pneumonia. The authors noted that the Advancing Quality program also provided larger bonuses, and that the funds were invested in internal programs to improve the quality of care rather than accepted as personal income.

“Participating hospitals adopted a range of quality-improvement strategies in response to the program, including the use of specialist nurses and the development of new or improved data-collection systems linked to regular feedback about performance to clinical teams,” Sutton and colleagues wrote. In addition, hospital staff met face to face regularly to review problems as opposed to the use of webinars in the HQID.

The authors pointed out other design differences, including Advancing Quality’s larger bonuses and a higher probability of achieving benchmarks to receive bonuses.

“[D]etails of the implementation of incentive programs and the context in which they are introduced may have an important bearing on their outcome,” they concluded. “We cannot be certain from these results what caused the reduced mortality associated with the introduction of financial incentives for hospitals in England, but the possibility of a substantial effect of the incentives on mortality cannot be excluded.”

Arnold M. Epstein, MD, of the Harvard School of Public Health in Boston, reiterated that details in the program design are critical in an accompanying editorial. He offered a review of pay for performance in the U.S. and noted that CMS has revised its program since HQID. “Over time, value-based purchasing may indeed help improve the quality of care, but the speed of progress will probably depend on such details,” he wrote.