PLoS: Pay-for-performance could hurt those in less-advantaged areas

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Pay-for-performance is an increasingly popular approach in the U.S. to improving healthcare quality. But the planned nationwide implementation of institutional bonuses mandated under federal healthcare reform threatens to act as a "reverse Robin Hood," potentially causing hospitals in less advantaged regions to lose funds to healthcare facilities in more affluent areas of the U.S., according to a study published June 29 in PLoS Medicine.

Jan Blustein, MD, a professor of health policy and medicine at New York University in New York City, and colleagues examined reporting data provided by 2,705 hospitals from 2004 to 2007 in treating acute MI (AMI) and heart failure (HF), using a methodology previously suggested by the Centers for Medicare & Medicaid Services (CMS) to score hospital performance. They then calculated scores for each hospital.

Researchers found that hospitals operating in locations with more wealthy economic and human resources attained significantly higher clinical process scores than those located in less advantaged areas during the study period.

For example, for HF in 2004, hospitals located in counties with longstanding poverty had mean Hospital Quality Alliance (HQA) composite scores of 73, compared with a mean of 84.1 for hospitals in counties without longstanding poverty. Hospitals located in counties in the lowest quartile with respect to college graduates in the workforce had mean HQA composite scores of 76.7, compared with a mean of 86.2 for hospitals in the highest quartile.

Performance on AMI measures showed similar patterns, according to the authors. Performance improved generally over the study period. Nevertheless, by 2007—four years after public reporting began—hospitals in locationally disadvantaged areas still lagged behind their locationally advantaged counterparts.

This lag in the clinical indicators translated into substantially lower net scores under CMS's Performance Assessment Model, which would presumably lead to reduced funding under Medicare's Value Based Purchasing (VBP) determined by CMS, the authors said, adding that there are still opportunities "to modify and improve upon the current version" of hospital pay-for-performance.

Holding providers accountable is not an unreasonable approach to quality improvement, but "it must be done in a way that attends to the profound inequalities in local circumstances that shape life in the 21st century," the study concluded.

"The findings suggest that U.S. policy makers may need to modify how they measure performance improvement—the current Performance Assessment Model gives hospitals that start from a low baseline less credit for improvements than those that start from a high baseline. This works against hospitals in disadvantaged locations, which start at a low baseline," the authors wrote.

"Second and more generally, they suggest that there may be a tension between the efficiency goals of pay-for-performance and other equity goals of healthcare systems," they concluded. "In a world where resources vary across regions, the expectation that regions can perform equally may not be realistic."