Hospital pay for performance incentives may backfire among safety-net hospitals

May 14, 2008

The same government-backed incentive programs aimed at improving the care all Americans receive in hospitals may be widening the gap between poor, underserved patients and those who are insured or can afford to pay for their own care, according to a new study led by a University of Pennsylvania School of Medicine physician.

“Though public reporting and pay for performance are designed to improve quality of care, the smaller performance gains at safety-net hospitals will be very harmful to these hospitals, damaging their reputations and finances,” says lead author Rachel M. Werner, MD, PhD, assistant professor in Penn’s Division of General Internal Medicine. “Ultimately, this could widen existing disparities between hospitals, with rich hospitals getting richer and poor hospitals becoming poorer.”

Werner and her colleagues from the University of California at San Francisco analyzed how well “safety-net” hospitals – facilities that serve large populations of low-income, minority and Medicaid patients – delivered care compared to non-safety-net hospitals. The findings, published this week in JAMA, show that safety-net hospitals had significantly smaller gains in care improvement over time, and were less likely to be among the top-ranked facilities recognized for providing high-quality care.

The researchers used data from the Centers for Medicare and Medicaid Services (CMS) public reporting Web site, Hospital Compare, to evaluate hospital performance. Since 2004, some U.S. hospitals have received pay-for-performance bonuses based on their record in providing recommended care for several key conditions including heart attack, heart failure and pneumonia. Hospitals that didn’t meet performance standards faced financial penalties. Werner found that under this pay for performance system, safety-net hospitals would have received smaller bonus payments and been more likely to be financially penalized – a hit she theorizes may ultimately damage their reputations and lead to cash shortfalls that leave them unable to invest in quality improvements like nurse staffing or information technology such as electronic health records.

“Many of these hospitals are already plagued by financial problems,” she says. “They are least prepared to absorb the hit of a financial penalty, which only puts them further behind the 8-ball for making quality improvements, and ultimately penalizing the patients who rely on safety-net hospitals for their care.”

Werner and her colleagues propose that to level the playing field, pay for performance programs be redesigned to provide bonuses each time hospitals deliver appropriate care, rather than only when they achieve targets that may be unrealistic for their payer mix. The researchers also suggest providing subsidies to fund quality improvements in safety-net hospitals, a model that has already been used successfully among some federally qualified health centers.

Source: University of Pennsylvania

Explore further: Ants don't get Alzheimer's

Related Stories

Ants don't get Alzheimer's

February 3, 2016

It's a poignant fact of life: no matter how much we exercise, or how many wheatgrass smoothies we slurp, our bodies still age. As the years pass, skin wrinkles, eyesight falters, hearing fades. It's called senescence—the ...

Two-for-one bacterial virulence factor revealed

January 15, 2016

We've all seen the headlines. "Man found to be shedding virulent strain of polio"; "Virulent flu strain in Europe hits the economy"; "Most virulent strain of E. coli ever seen contains DNA sequences from plague bacteria."

Metamaterials boost sensitivity of MRI machines

January 15, 2016

A group of researchers from Russia, Australia and the Netherlands has developed a technology that can reduce magnetic resonance imaging (MRI) scanning times by more than 50 percent, allowing hospitals to drastically increase ...

Tech sector tackles America's concussion epidemic

January 31, 2016

A number of technology startups are devising creative new ways of detecting concussions in pro and amateur athletes, using apps, tablets and sensors to monitor the often debilitating brain injury.

New technology puts health care in palm of your hand

January 7, 2016

Managing your health care is moving increasingly to the palm of your hand—with new smartphone-enabled technology and wearable sensors that examine, diagnose and even treat many conditions and ailments.

Recommended for you

How the finch changes its tune

August 3, 2015

Like top musicians, songbirds train from a young age to weed out errors and trim variability from their songs, ultimately becoming consistent and reliable performers. But as with human musicians, even the best are not machines. ...

Machine Translates Thoughts into Speech in Real Time

December 21, 2009

(PhysOrg.com) -- By implanting an electrode into the brain of a person with locked-in syndrome, scientists have demonstrated how to wirelessly transmit neural signals to a speech synthesizer. The "thought-to-speech" process ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.