Hospitals Set Focus on Quality

As provider reimbursement begins to move toward models that favor quality over quantity, CEO compensation may be following the same path-with CEO pay determined more by quality measures than strictly by financial gains.

As provider reimbursement begins to move toward models that favor quality over quantity, CEO compensation may be following the same path—with CEO pay determined more by quality measures than strictly by financial gains. By focusing on quality measures, hospitals can show that they are committed to improving patient outcomes and wellness. Some health systems are even finding that the benefits of transitioning to quality-based measures far outweigh the challenges.

“In an environment where there will be a bonus or an incentive for performance, I don't think it’s reasonable to have it based purely on financial performance,” said Ana Pujols-McKee, MD, executive vice president and chief medical officer of the Joint Commission. “Quality is the product we’re paying for as the consumers. That’s what we expect.”

Ascension Health, a not-for-profit health system, found that quality measures in annual incentive plans increased executives’ salaries by 10% to 80%, and 40% to 100% in 3-year incentive plans.

Still, for those hospitals that treat disproportionate numbers of sickly and poor, the gains are less even. An expert research panel found that while Medicare and private insurers pay for quality of care, they do not account for factors such as a patients’ education or income.

“Factors far outside the control of a doctor or hospital—patients’ income, housing, education, even race—can significantly affect patient health, healthcare, and providers’ performance scores,” said Christine K. Cassel, MD, president and CEO, National Quality Forum.

Low-income individuals often cannot afford certain medications, and even when they can, those with low levels of literacy might not understand the written instructions they’ve received from their physician. Although some clinical factors such as diabetes are taken into consideration, hospitals feel as though they are being treated unfairly when they are penalized for missing quality benchmarks which result from treating large numbers of poor and sickly patients.

“The administration’s current policy on adjustments for socioeconomic status are quite inadvertently exacerbating disparities in access to medical care for poor people who live in isolated neighborhoods. I’m sure that’s not what President Obama intended with the Affordable Care Act,” said Steven H. Lipstein, president, BJC HealthCare in St Louis, Missouri, and expert on the research panel. “Readmissions are difficult to avoid in patients who can’t afford post-discharge medications, have no social support to help with recovery at home, have no way to get to follow-up doctor appointments, or are homeless.”

Future quality-based reimbursement models may center on comparing hospitals with “peer groups,” or providers who treat similar patient populations.

Around the Web

Bonuses Still Tied to Better Financials [Modern Healthcare]

Health Law’s Pay Policy Is Skewed, Panel Finds [The New York Times]