When quality incentives go poof

Twenty years of Congress driving quality improvement in health care went up in smoke in a month or so. Now what?

It all started with good intentions. Motivated by the landmark 2000 Institute of Medicine report “To Err is Human,” Congress created pay-for-performance incentive programs, first for hospitals and then for health care professionals. Pay for quality, pay for value, don’t pay just for volume. Medicare implemented them. Hospitals and now physicians and other health care professionals have been carrying them out.

The results are in. They don’t work.

A major study in BMJ found no difference in hospital patient outcomes between early and late adopters of pay-for-performance initiatives. “Pay for performance programs as currently implemented are unlikely to be successful in the future, even if their time frames are extended,” it concludes.

Reductions in hospital re-admissions appeared to be a recent bright spot. But a substantial share of the reduction derives from hospital coding methods not from change in re-admissions, according to a study in JAMA. And hospitals reporting the greatest reduction in re-admissions tended to correlate with higher local death rates. Not the outcome people were looking for.

For physicians and other health care professionals, Congress ordered the Merit-based Incentive Payment System (MIPS) to succeed the failed “sustainable growth rate” formula.  The Medicare Payment Advisory Commission planted a stake in its heart in December. Before MIPS' fourth birthday, "Time is of the essence to develop a replacement for MIPS,” a senior MedPAC analyst told Modern Healthcare, because “it will not achieve the goal of identifying and rewarding high-value clinicians.” As implemented by CMS, the MIPS reporting burden is too great. Its data production is not useful to promote health and health care. Fortunately a half-million Medicare health care professionals are exempt from MIPS reporting in 2018.

Good intentions, even good systems that sound right, are no guarantee of success.

What can the health care industry anticipate?

No one is any less interested in quality improvement. No one is any less interested in addressing costs.

Expect policymakers to try again.

Will you be there?

Contact me here.