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Payors expand quality incentives

Stuart Guterman, CMS director of the Office of Research Development and Information

By Christopher Guadagnino, Ph.D.

Recent concern over medical error reduction and patient safety seems to have converged with the need to slow health care inflation, sparking a new stage of quality incentives.

The pay-for-quality concept is not new, as some insurers, including Independence Blue Cross (IBC), Highmark Blue Cross Blue Shield, and Blue Cross of Northeastern Pennsylvania have for several years been offering reimbursement bonuses on top of flat capitation payments to primary care physicians in their HMOs who follow clinical guidelines such as HEDIS measures.

The quality incentive model is now being expanded to hospitals and specialists and is poised to play a much larger role than ever before in Pa.’s health care delivery system. Although health care purchasers have been clamoring for lower costs, and consumers have always had a direct stake in high-quality health care, neither has been at the forefront in promoting, developing and driving incentives for health care providers to improve quality of care and to reduce cost (as reported in last month’s Physician’s News Digest).

Health insurers are now stepping in to lead that charge. Drawing from an abundance of process- and outcome-based clinical guidelines for what constitutes quality health care, insurers are introducing new programs that tie together provider accountability and reimbursement in the form of incentive programs that reward efficient and superior care.

IBC has begun to offer bonus reimbursements to hospitals that meet agreed-upon practice guidelines for certain clinical areas. Medicare is piloting two quality-based bonus reimbursement models: one for hospitals and one for large physician groups. And a pilot program by Aetna, although not offering bonus reimbursement as an incentive, is offering the promise of higher patient volume to specialty physicians who meet certain clinical quality indicators by participating in a preferred panel of physicians for employees of self-insured companies.

Programs of this sort, and the prospect of more insurers developing such programs, take clinical guidelines to a new level and raise questions about how they may transform the medical profession and patient care. Quality is notoriously difficult to define. Choice of guidelines matters, and payment incentives will likely steer clinical behavior toward those guidelines more than ever before.

Insurers, participating providers and some health care analysts maintain that steerage toward evidence-based medicine is a good thing, and are optimistic that it will reduce unnecessary variation in care and result in fewer avoidable errors, patient complications and hospital readmissions. Quality is improved and cost is saved by having avoided these adverse outcomes.

But the approach may have tradeoffs and unintended consequences. It is not certain whether rewarding a finite selection of measurable guidelines may result in a neglect of care that is not addressed by the selected guidelines, or neglect of care for which guidelines do not exist. Reimbursing for guideline-based care is dependent upon correctly coded diagnoses of patients, which is frequently done by non-physicians, is subject to variation, and may result in incentivized treatments for the wrong patients.

All of the reservations about guideline-based medicine become more salient as the incentivized programs become more widespread.

Pay-for-quality programs also require data collection and analysis systems that may be beyond the means of smaller physician practices or community hospitals. The programs may push providers to consolidate in order to achieve the necessary infrastructure efficiency to participate. The programs may not work in rural regions served by a single hospital that has the market clout to demand higher overall insurer reimbursements rather than accept such an incentive program.

While the programs are currently voluntary and the data confidential, they may become mandatory and public, potentially threatening providers who do not perform well on the guidelines.

IBC’s Hospital QIPS

Since early last year, Independence Blue Cross has begun to offer to hospitals, upon their contract renewal, an option of receiving a baseline level of inflation-adjusted reimbursement increases with the opportunity to earn bonus adjustments based upon performance relative to a set of clinical guidelines for selected procedures.

IBC has had a similar model, the Quality Incentive Payment System (QIPS), in place for almost 12 years with its contracted primary care physicians, who receive a base capitation amount, plus bonuses tied to how they score relative to others in their primary care specialty among IBC’s network physicians. Scores are based primarily on implementing process measures contained in the Health Plan Employer Data and Information Set (HEDIS) guidelines, and on patient satisfaction surveys, notes John Zamzow, IBC contracting and provider network senior vice president. There are also incentives for other parameters such as electronic submissions, generic prescribing and extended office hours. Physicians’ QIPS bonuses average about 40 percent of their base capitation, with most of that related to the quality measures, says Zamzow.

In IBC’s new Hospital QIPS program, hospitals agree to base part of their annual rate increase on their performance against agreed-upon quality measures drawn from sources such as the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and the Leapfrog Group, as well as outcome measures from the Pennsylvania Health Care Cost Containment Council (PHC4). The range of minimum and maximum annual rate increases is negotiated separately with each hospital system.

IBC is trying to minimize controversy about quality guideline selection and measurement by using guidelines drawn from third-party, industry-accepted sources in order to gain providers’ acceptance of them, and by negotiating a customized choice of guidelines individually with each hospital, says Zamzow.

Sample guidelines include meeting or improving upon expected mortality and readmission rates, using intensivists in the ICU, using a checklist for treating all ICU patients, using a computerized physician order entry system, and meeting certain nurse-to-patient staffing ratios. Using JCAHO guidelines, hospitals can be measured, for example, on whether patients with acute MI are given aspirin when they enter the ER, or whether they receive beta blockers upon discharge from the hospital.

IBC eventually hopes to include in the model the use of standardized treatment protocols for certain illnesses – particularly those that account for large hospitalization costs such as congestive heart failure, diabetes and hypertension – drawn from various medical specialty academies and chosen with the input of contracting hospitals, says Zamzow.

IBC says it has tried to set performance levels, which must also be mutually agreed upon, such that below average performers still get an increase above inflation, while superior performers get more, and most hospitals have a very good chance of scoring in the middle of the range.

To date, IBC says that Mercy Health System is fully operational under the Hospital QIPS model, while Temple University Health System, Chestnut Hill Hospital and Pottstown Hospital have incorporated Hospital QIPS in their new contracts but agreement on parameters has not been reached. IBC is actively negotiating with other health systems about using the model, while three hospital systems whose contracts came up for renewal have thus far declined to use it, expressing concerns about specific parameters, whether they could control those variables and how they would fare under the model, Zamzow notes.

Hospital performance is currently kept confidential, but IBC does not preclude that from changing, particularly since there is increasing demand by consumers for performance information, says Zamzow. Such disclosure would need to be mutually agreed upon, he adds.

IBC is optimistic that every hospital will eventually participate in the model. Says Zamzow, “The industry is trying to develop systematic ways to reduce errors and improve the chance for better outcomes. To the extent that there’s a financial incentive that helps reward that, it just adds to people’s desire to improve outcomes.”

Zamzow notes that the bonus payments under the program will help defray, but will not always be sufficient to cover, the costs hospitals incur by implementing changes to meet the quality improvement guidelines. He believes most hospitals plan to make improvements to their systems of care on their own in any case, and says the incentive bonuses may offer a nudge to make them more quickly than they otherwise would have.

Further, he says, incentive payments are based both on absolute levels of performance as well as relative improvement, so both hospitals that have done the least in terms of quality improvement and those that are already performing well can gain from the Hospital QIPS model.

A preliminary track record of IBC’s Hospital QIPS program has been established by the Mercy Health System in southeastern Pa., which was the first hospital system to adopt the program and is approaching the end of its second year of participation by its five hospitals in the Philadelphia region plus St. Mary Medical Center in Langhorne.

Mercy felt that the program would offer its hospitals extra incentive to meet their patient care quality improvement goals and has negotiated nine categories of clinical quality and patient safety indicators with IBC, either derived from, or inspired by organizations such as the Leapfrog Group, JCAHO, PHC4, Agency for Healthcare Research and Quality (AHRQ), plus some customized indicators, including improved information exchange between Mercy hospitals and IBC, according to Mark Baumel, M.D., Mercy Health System’s chief medical officer and senior vice president of medical management.

While the agreed-upon list of indicators includes outcome benchmarks of risk-adjusted mortality and hospital readmission rates, most indicators are evidence-based process measures – such as using appropriate deep venous thrombosis (DVT) prophylaxis to prevent venous thromboembolism in perioperative patients, says Baumel. Although a good quality incentive program needs both outcome and process measures, he maintains, over-reliance on outcome measures is risky because a high volume of patient encounters is needed before valid statistical differences can be made when comparing performance to benchmarks. Process measures help to instruct clinicians on what they need to do to achieve the desired outcomes, he adds.

Although some Mercy physicians were skeptical about the concept of evidence-based medicine, Baumel says he was pleased with the manner in which most have bought into the use of quality indicators at Mercy hospitals. The administration has made an effort to listen to physician concerns and has actually gone back to IBC to alter an indicator based upon physician input: an AHRQ indicator concerning the use of appropriate preoperative antibiotics for certain surgical cases, says Baumel.

One challenge has been translating evidence-based medicine into contractual terms, as guidelines do not provide guidance on every permutation that may exist in a clinical scenario and gaps must be interpolated so that contractual accountability for guideline compliance can be established in every scenario, Baumel explains. For example, DVT prophylaxis algorithms may speak to “major and minor surgery” without spelling out types of indicated prophylaxes for all types of surgeries and patients. Putting guidelines into contractual language can be a complex and arduous process, says Baumel, and Mercy consulted with its physicians to do so.

Mercy is pleased with the program’s impact so far. The program has been a strong catalyst to focus CEOs and managers on quality improvement, which has become a top corporate agenda item for the health system, says Baumel. An entire infrastructure has been developed around the program, including a support services steering committee to oversee and help guide educational and system change efforts involving quality leaders and senior medical staff at each hospital, he adds.

At the close of the first year of the program, Mercy’s hospitals have seen a 15 to 25 percent performance improvement in their preoperative antibiotic and DVT prophalaxis indicators, which Baumel says translates into real morbidity- and mortality-saving efforts.

More clinical pharmacists – scarce professionals to recruit – have been hired and some Mercy hospitals have doubled, tripled and even quadrupled the amount of patient days when a clinical pharmacist has interacted with an ICU team, a process measure linked to reductions in medication errors and adverse drug reactions, Baumel says. Mercy’s hospitals have also seen improvements in meeting JCAHO core process measures, including those addressing acute MI, heart failure and pneumonia, he adds.

Scores for improvements on each indicator at each individual hospital are rolled up into a total overall score for the entire contracting entity – the six Mercy hospitals – and bonuses are delivered in the form of increased per diem rates. In addition to improving patient care, Mercy has seen financial reward in the program, although a confidentiality agreement precludes Baumel from saying how much.

Others Consider QIPS

Other Pa. health insurers are considering implementing a financial incentive model for hospitals or for specialists.

Highmark Blue Cross Blue Shield, like IBC, has had a QIPS program for primary care physicians for several years, and says it is considering moving in the direction of a quality-based incentive program for hospitals.

Geisinger Health Plan is watching the marketplace to see how this model develops, and says it is talking with physicians about it.

UPMC Health Plan does not yet have a membership volume high enough to collect sufficient data for such a model, but says it is targeting 2004 for such a model with physicians.

Capital Blue Cross is interested in piloting a pay-for-quality bonus incentive pilot program for physicians, and is optimistic that it will have some form of program in place for physicians, at least on a small scale, some time next year, according to Barbara Kalfin, Capital’s senior director of clinical management and network operations. “We at Capital recognize that the way we fund health care doesn’t in any way reward for quality, and there’s a strong feeling by our medical directors and some of the providers in our community that there’s a business case for beginning to reward for quality,” she adds.

Capital is entertaining recommendations from all specialties for starting a bonus incentive program, while OB/GYNs have been especially vocal in expressing interest and generating ideas, such as rewarding annual ACOG recertification, says Kalfin. Capital is also exploring ideas such as rewarding physicians who refer patients to its disease management program, Kalfin adds.

Medicare’s Quality Incentive Pilot Programs

As the first national test by Medicare of the impact of economic incentives on quality of care, the Centers for Medicare and Medicaid Services (CMS) is launching its Premier Hospital Quality Incentive Demonstration. The project will award bonus Medicare payments to hospitals based on their performance on evidence-based quality measures for inpatients with heart attack, heart failure, pneumonia, coronary artery bypass graft, and hip and knee replacements. The quality measures for the program are drawn from Quality Improvement Organizations (QIOs), JCAHO, AHRQ, the National Quality Forum (NQF), the American Hospital Association, Premier Inc. and other sources.

Within the five clinical areas, CMS will evaluate hospital performance on 34 measures, including process steps such as prompt administration of beta blockers and outcomes such as mortality rate. Hospitals will be scored on a subset of measures related to each condition, with performance on each measure rolled up as a composite score for each clinical condition and calculated annually for each hospital, according to Stuart Guterman, CMS director of the Office of Research Development and Information, which oversees all Medicare demonstration projects.

CMS will then categorize the distribution of hospital quality scores into deciles, awarding a two percent Medicare payment bonus to hospitals in the top decile ranking for each clinical condition, and a one percent bonus to hospitals in the second decile for each condition. CMS estimates the bonuses to cost Medicare about $7 million a year for each of the three years of the demonstration.

After the first year’s performance data is collected, a baseline will be established to set payment reductions in year three for inferior care: hospitals will receive one percent lower DRG payment for clinical conditions that score below the ninth decile baseline level and two percent less if they score below the tenth decile baseline level. CMS hopes that improvements will occur at all hospitals, and Guterman notes that all hospitals in year three could theoretically perform above the bottom two deciles of year one’s baseline levels, in which case none would be penalized.

The project was proposed to CMS by Premier, Inc., a health care alliance that is owned by 200 hospitals and health care systems nationwide and supports group purchasing, insurance programs and performance improvement services. Premier has affiliations with 1,500 hospital facilities nationwide, of which 500 have been using a national clinical database called the Premier Perspective System to share process, outcome and efficiency measures. The Medicare demonstration is open only to hospitals that use the database, while over 200 have signed up as of late October, Premier continues to recruit additional participants and CMS says it expects a total of 300 participants.

Participating hospitals will report data previously collected with the Premier Perspective database to provide a historical reference on the demonstration’s quality indicators, which will be published at by the end of 2003. An interim report on the demonstration will be posted in mid-2004, while the first year results will be reported in early 2005 recognizing hospitals with the highest quality and noting which hospitals received the bonus awards.

CMS expects performance improvement to be driven both by the financial reward incentive – a “carrot everybody will be chasing” – and by the desire to avoid being at the bottom of the performance list, says Guterman. CMS will use Quality Improvement Organizations, formerly known as Peer Review Organizations, to audit performance results and to work proactively with providers to help them improve their ability to comply with identified best practices, says Guterman.

CMS will use the Premier demonstration as a pilot test of the pay-for-quality concept and may develop a request for additional proposals for this concept in 2004. Based on the performance of the demonstration, CMS will develop conclusions on how it might be applied to policy. “But there’s certainly interest in the potential of applying this more broadly,” says Guterman. “Ideally, we would like to get to where payment reflects the quality of care provided to a beneficiary, and to where it’s explicit, program-wide, that the Medicare program demands the highest quality of care and is willing to pay more for good quality and presumably less for inferior care,” he adds.

A second CMS project, the Physician Group Practice Demonstration, will test a hybrid payment methodology for paying physicians by combining Medicare fee-for-service payments with a bonus pool derived from savings achieved through improved management of patient care and services. Open only to physician group practices with at least 200 physician full-time equivalents – such as freestanding multispecialty practices, faculty group practices or physician groups affiliated with health care systems or medical centers – the three-year demonstration includes incentives for improved performance on process and outcome quality indicators, as well as for cost savings through increased practice efficiency.

Seventy percent of the bonus payments will come from demonstrated efficiency improvements, calculated by how well practices meet risk- and growth rate-adjusted expenditure targets relative to a baseline amount equal to a practice’s average total payments under Medicare Part A and part B. Participating in the model does not entail risk, as bonus payments will be derived from a separate pool created from the savings, and the practices will continue to bill and be paid standard Medicare fee-for-service reimbursement regardless of their performance.

The remaining 30 percent of the bonus payments will be based upon how well a practice performs on eight quality indicators, such as meeting threshold targets for annual influenza vaccines, hemoglobin A1c tests every year for diabetics, mammograms every two years for women aged 52 to 69; and rate of ACSC admissions per 1,000 Medicare beneficiaries.

CMS says the quality indicators were chosen based upon several criteria: ability to be derived from claims data to minimize burden on participants, common and widespread enough use to ensure credibility among physicians, currently used or developed for a Medicare population and published in peer-reviewed literature, wide enough range of different types of medical care interventions represented, and focus on high volume diseases or clinical conditions to ensure sufficient sample sizes for reliability in evaluating physician performance. Participating practices may also propose substituting two measures that may be unique to their own practices.

CMS is currently selecting sites for the demonstration and hopes to announce its choice within a few months, says Guterman.

Aetna’s Aexcel Program

Aetna Inc. has developed a quality incentive program for physicians that, instead of increased reimbursement, offers the possibility of increased patient volume in return for superior performance against a number of clinical and cost measures. Using information from its vast claims database, Aetna is able to identify physicians who have met clinical performance measures in six high-risk specialties: cardiology, cardiothoracic surgery, gastroenterology, general surgery, OB/GYN and orthopedics, according to Donald Liss, M.D., senior medical director for Aetna’s mid-Atlantic region.

Eligibility requirements for physicians to participate in the Aexcel panel include: (1) having more than ten encounters with Aetna members within the past two years; (2) performing better than Aetna’s average, on a case-adjusted basis, on three clinical measures – a baseline 30-day unexpected hospital readmission rate, a rate of adverse events during inpatient stay, and a cardiologist’s use of statins upon discharge; (3) meeting Aetna’s outcome/cost ratio using an efficiency index calculated by episode of care software that compares cost and outcome differences between surgeons; and (4) meeting an appropriate geographic threshold for access to cardiologists by Aetna enrollees.

In each of its test markets, between 50 and 70 percent of physicians in the six specialties meet these participation criteria, says Liss. Aetna plans to share performance data with participating physicians and help those who do not perform well to make mid-course adjustments, he adds.

Consumer choice provides the incentive for quality improvement. The Aexcel panel of specialists will be offered as a “tiered” PPO product: a preferred physician panel option for self-funded companies for which Aetna enrollees would pay the least out-of-pocket to see Aexcel physicians, pay more to see physicians in Aetna’s regular PPO panel, and pay still more to see out-of-network specialists, Liss explains. Reimbursement to Aexcel physicians is the same as for other Aetna specialists. Aetna anticipates eventually offering Aexcel as an underwritten insurance plan with a premium, says Liss.

The Aexcel program is scheduled to begin Jan. 1 in three markets – Dallas/Fort Worth, North Florida, and Seattle/Western Washington, with additional markets expected to be added in mid-2004 and in 2005. Liss says the selection of additional markets depends upon employer groups interested in purchasing the option, a broad enough provider network and enough performance variation to create a separate physician panel.

Reservations About Incentive Programs

While the latest versions of pay-for-quality incentive programs appear to offer the promise of measurable improvement in some areas of patient care, obstacles may prevent the model from working for some hospitals, and there are unanswered questions about unintended impacts of such a model on physicians and patient care.

Smaller hospitals may not have the resources to participate in such a program, or may be pressured to affiliated or merge with another health system to be able to do so. Baumel says that Mercy hospitals have undergone an extraordinary data collection effort, requiring centralized resources to devote to that effort, and he notes that a larger hospital system is more likely to have the scale and resources to do that – although he believes a single hospital may be able to participate in a scaled-down version of the program.

It was an established network of hospitals using a sophisticated clinical data collection software system that came to CMS to initiate Medicare’s hospital quality incentive program. An expansion of the program would require the capacity for all hospitals to be able to provide that kind of information, a capacity which many hospitals currently lack, and CMS may need to offer additional financial incentives to quicken the diffusion of information management technology, says Guterman.

The model may face geographic market obstacles. Blue Cross of Northeastern Pennsylvania says that a Hospital QIPS program is unlikely to work in its service areas, most of which have only one hospital. Many of those hospitals are hurting financially and the insurer is reluctant to do anything that might adversely affect payments to them, according to Mark Ungvarsky, senior director of analytical services.

Regions with limited access to providers also preclude doing a restrictive network model for specialists, like Aetna’s, Ungvarsky adds.

Incentives by health plans to drive clinical behavior may encounter patient resistance. After Capital Blue Cross started incentivizing the transfer of organ transplant patients to Centers of Excellence to encourage the use of providers doing a high volume of such procedures, which guidelines say leads to better quality outcomes, Capital’s members said they preferred to have their services in their local area, notes Kalfin. “I don’t know how that bodes as we try to figure out how to incentivize for procedures,” she says.

Unless participation in incentive programs becomes mandatory, hospitals may self-select, with poorer performers being the most reluctant to participate. CMS will take that possibility into account as it evaluates its hospital incentive pilot program, but believes that concern is offset by the potential value of testing the approach of the program with its current participants – learning how to collect, post and evaluate quality information effectively – and testing consumer and hospital impacts, says Guterman.

Physician buy-in to quality incentive programs depends upon accurate and reliable guidelines derived from credible clinical sources. It is more difficult to gain physician acceptance of data that is produced and managed through an insurance company’s billing and claims analysis system as a proxy for third-party quality measures, according to David Shulkin, M.D., vice dean and chief quality officer at Drexel University College of Medicine.

One of the reasons IBC’s and Medicare’s clinical guidelines are derived from national quality organizations is to maximize provider acceptance of them. Aetna’s guidelines come from the company’s internal database and its own benchmarks.

Two more problems with incentive programs, says Shulkin, are heavy reliance on outcome measures, which may lead to provider avoidance of treating sicker patients, and conflicting sets of guidelines across different payors which could conceivably incentivize different treatments for the same condition.

For its Medicare hospital demonstration, CMS intentionally chose to emphasize process guidelines in its list of 34 clinical measures, which Guterman says are not as subject to disagreements about risk adjustment methodologies as outcome guidelines traditionally are. Guterman says CMS needs to sort out the potential problem of its guidelines conflicting with those of other incentive programs, and it will use its collected data to identify possible improvements, such as consolidating performance measures to increase uniformity with other programs, if necessary.

Using claims data to audit performance in a pay-for-quality program may be a fundamental defect in the concept, as the clerical coding process is not treated as carefully as clinical data and may not always accurately reflect actual care rendered, says Shulkin. Aetna is concerned about this issue, and says that its episode of care auditing – which covers treatment of a single patient over a defined period of time as its unit of analysis – gives a better view of care than does a single claim for a single service, says Liss. Using claims data, he adds, reflects a tradeoff between lower data collection costs and the expense of chart-abstracted information.

Using discharge diagnosis data as the basis of awarding pay-for-quality incentives has other potentially serious problems. According to C. Richard Schott, M.D., a cardiologist at Riddle Hospital in Delaware County, variation in diagnoses can be a problem. It is not uncommon for patients to get coded as having heart failure when the patient in fact does not have heart failure, as radiologists can be extremely variable in how they read X-rays, particularly portable X-rays, he says. Diagnosis coding is also typically done by non-physicians in a medical records department who aggressively search for primary and secondary diagnostic codes to enter into a patient’s billing record, he notes. Both sources of variation should be a cause for concern.

A pay-for-performance system may not offer a large enough incentive to produce the desired behavior. Health services literature suggests that 18 to 20 percent of variable payment is needed for the financial incentive to achieve practice guideline compliance, says Shulkin. Medicare’s hospital incentive bonus payments are only one and two percent, while the maximum bonus in its physician group practice demonstration is 15 percent. Disclosure of the amount of bonus possible under IBC’s Hospital QIPS is protected by contract confidentiality.

On the other hand, overly zealous compliance with incentivized guidelines without considering a patient’s whole clinical picture has the potential to adversely impact patient care. When reimbursement for congestive heart failure gets linked to the inclusion of a significant number of medications that are known to have potentially beneficial effects of treating heart failure, says Schott, “More patients will go home on all of these medications.” Seniors with limited resources or with no prescription drug coverage will have to foot the bill for potentially many more medications. A lot of elderly people also will not tolerate ACE inhibitors or beta blockers, and guidelines often do not specify when a drug is not indicated, notes Schott. Although their hospital length of stay will be short, the effect of the drugs on their renal function may take a week or so to reveal a problem, he adds.

Guideline-based incentive systems are designed to improve clinical quality and reduce costs, inasmuch as care is more efficient and prevents complications and prolonged hospital stays. It is not clear to what extent this savings mechanism will be diluted by overtreatment produced by overzealous guideline compliance that results in higher-level care than is warranted.

Clinical guideline incentive systems are also blind to the variation in physician skill levels, argues Thomas Ross, Ph.D., a health care economist at Kings College in Wilkes-Barre. Physician X may be more competent at providing Treatment A for a given condition, but will instead provide Treatment B because guideline compliance rewards it. The question becomes whether the incentivized treatment delivered by a physician with less experience is better for the patient than a different treatment delivered more skillfully.

There are also many areas of medical art that are not reducible to clinical guidelines, and for which subjectivity is inevitably involved in recommending the best pathway for effective treatment, says Ross. In cases leading to elective surgery, for example, some physicians may recommend that a patient go directly to surgery, while other physicians may recommend treatment with pharmaceuticals.

Incentivizing certain medical practices may devalue or diminish attention paid to treatments that are not incentivized, such as quality-of-life treatments that do not directly translate into cost-saving hospital readmission levels or mortality rates. An approved procedure may leave a patient functional, but in pain, because it is inexpensive, while a different procedure may leave a patient in less pain, but be excluded from incentivized guidelines because it is more expensive, says Stephen Foreman, Ph.D., J.D., MPA, director of the Pennsylvania Medical Society’s Health Services Research Institute.

Baumel of Mercy Health System rejects that view: “Just because something is included in this IBC quality incentive payment system program doesn’t mean we forsake everything else that we are doing to improve care to patients. We have strong pain management programs at each of our hospitals, even though pain management isn’t in the IBC QIPS program.”

For a quality incentive program to be effective, Baumel maintains, “You have to focus on a limited number of things while you’re trying to do a lot of other things very well. I think it’s appropriate to keep programs like this to a manageable number of indicators so as not to dilute those efforts,” and then take on the next challenge once those areas are improved.

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