The doctors and nurses at the North Shore-Long Island Jewish Health System always figured they did a great job caring for the 5 million people living in their service area. With 14 hospitals and nearly 5,000 beds on Long Island and in New York City, its work force of 38,000 employees prided itself on high-quality care and patient satisfaction.
But in 2003, the medical workers agreed to take part in a first-of-a-kind ongoing study to test the pay-for-performance model on a few core groups: those treating heart patients, pneumonia cases, and people with hip or knee replacements. The federal Centers for Medicare & Medicaid Services (CMS) launched the study to determine if economic incentives were effective at improving the quality of patient care. And officials at North Shore health system signed on for two reasons: to win funding, sure, but primarily to see if they could make their already top-notch patient care even better.
The rules were strict. The staff was given 30 measures to assess the treatment of thousands of patients. Heart attack victims, for example, had to receive aspirin within two hours of arrival, beta-blockers at discharge and smoking-cessation counseling. Pneumonia patients required flu screening and an assessment of the amount of oxygen reaching their blood. And surgery patients required antibiotics one hour before the first incision. The hospitals were graded on each criterion and given bonuses based on their performance.
“If you came in with a heart attack and you got an aspirin, but you did not get advice on quitting smoking when you left, then you didn’t get any credit for that case,” says Karen Nelson, the health system’s vice president of quality management. “It was all or nothing.”
Many companies balk at starting pay-for-performance programs because of the sheer time and effort it takes to create and maintain them. North Shore saw this up close: It had to train the staff, create documents and — most crucially — come up with the appropriate reporting channels. Documentation was crucial to making sure the hospital staff knew what it had to do, and to record that the care had been properly done. Although the cost of it all was impossible to tally, hospital officials said it’s clearly been worth the effort, and that’s hard to argue with. In mid-August, the CMS awarded North Shore $750,000 for raising its quality of care for the fourth year in a row.
The results weren’t unique to North Shore, either. All told, 275 hospitals are taking part in this national study, the Hospital Quality Incentive Demonstration. The Premier health care alliance, which is running the whole thing with CMS, analyzed data from 1.1 million patients and estimated that this single pay-for-performance study had saved the lives of 2,500 heart attack patients in its first three years.
Even with such results, critics exist who assert that such incentives distort the efforts of health care workers, putting a premium on paperwork over the often immeasurable causes and effects of proper care-giving — in effect, “teaching to the test.”
But it’s hard to argue with the results across the survey. North Shore’s chief medical officer, Lawrence Smith, cited Premier’s analysis in testimony before the House Ways and Means Committee this past April. If all hospitals in the country were to undertake the same reforms North Shore had, he said, it could reduce hospital costs by $4.5 billion annually because patients would receive better treatment and therefore would be less likely to return to the hospital. “If all hospitals nationally were to achieve the (study’s) three-year mortality improvements across the project’s five clinical areas, 70,000 lives per year could be saved,” he told the committee.
That sort of performance is hard to overpay for.
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