QUALITY: It's About BETTER Health Care, Granny

When you have a chance, get the grandparents away from watching those blood-pressure raising town halls on their televisions, and tell them this. Health reform is not about chopping Medicare. It's about making it better. And saving lives.

A test program now in its fourth year has shown how it can work. Hospitals that do a great job get rewarded. Those with a poor performance, get penalized. 

Premier, Inc., a health care alliance based in North Carolina, released the results of year four of their landmark Medicare demonstration project this week. You might remember last year I blogged about year three, one of the first instances of a pay-for-performance initiative enforcing financial penalties on low-performing providers. I even got a tiny mention on Modern Healthcare (free registration required).

Year four again brought good news about higher quality. BNA says:

According to Premier, the quality improvements saved the lives of an estimated 4,700 heart attack patients in four years. The more than 1.5 million patients treated in five clinical areas at the 230 participating hospitals also received approximately 500,000 additional recommended evidence-based clinical quality measures, such as smoking cessation, discharge instructions, and pneumococcal vaccination.

This is great news -- 225 hospitals will receive payments totaling $12 million this year. It's a drop in the bucket for such a large number of hospitals, and a drop in the ocean compared to our $2.2 trillion health system. But by definition this is a smaller scale project that we can learn from (involving about 4 percent of U.S. hospitals), and the principle is right on target. Value-based purchasing results in better patient care. 

Can this go nationwide? Not yet. CMS (the agency that runs Medicare) cannot make a program like this mandatory without an act of Congress. Additionally, CMS told us it would be hard at this point to expand outside of Premier, since they collect the data for CMS.  But Premier informed us that they'd be willing to do that for non-Premier hospitals.  Plus, only about ten percent of their members are participating - so there's room to grow there, too.

What's more, the principles and practices can be applied in different ways (keep reading!)

Last year, the real story was that Premier assessed penalties on nine hospitals that failed to improve against benchmarks. We have learned that three paid the penalty for year four, a total of $42,000. This is an extremely minor amount of money in terms of a hospital's total revenue, but it makes it a true value-based purchasing program. Penalties are an important part of value-based purchasing -- otherwise this is just another opportunity to pump more money into the health care system

It's the Physician Group Practice demonstration, though, with the real money. This demo encourages physician practices to coordinate care for the chronically ill. If costs rise slower than expected, the practice gets to keep 80 percent, and CMS gets 20 percent. BNA reports that the Marshfield Clinic in Wisconsin will alone receive nearly $14 million for year three of this demonstration. Dartmouth-Hitchcock, Geisinger, and two other practices will receive seven-figure payouts as well.

What can we learn from all this?  Premier released a great document recently that discusses how providers of all shapes and sizes can improve quality. And as I learned at a briefing at Premier's DC offices a couple years ago, hospitals where the board and the physicians were highly engaged were much more successful than those hospitals that did not have those two commitments. 

Certainly on this blog, we are building the case that there are a number of resources to help physicians and hospitals provide quality care. The key is getting them to work together so that patients receive care that is safe, timely, effective, efficient, equitable, and patient-centered every time.