By Joshua Urquhart on May 1, 2014
I saw this article a few days ago. It’s very interesting. Here’s the scoop: Since 2008, the Department of Health Care and Human Services (DHHS) has been charged with implementing and administering the Hospital Quality Initiative. That’s a program that pays Medicare-receiving hospitals incentive payments based on how well hospitals perform on certain quality measures or how much the hospitals’ performance improves on certain quality measures from their performance during a baseline period. It began under the Bush administration, but in 2011, the Obama administration DHHS promulgated a beefed-up rule greatly expanding the program.
Incidentally, this is part of a broader push by DHHS to implement a variety of similar incentive programs designed to reward high-performing providers, and in some cases, penalize low-performing ones. For example, under one of the better-known programs, the Primary Care Incentive Payment Program, doctors are eligible for a bonus of up to 10 percent of their Medicare billings if 60 percent or more of their Medicare practice consists of primary care services (CPT codes 99201 through 99215 and 99304 through 99350). In general, experts agree that this is a promising area of health care reform.
So what’s the problem? As noted in the linked article, hospitals and other providers that treat large numbers of poor people are a bit up in arms. They understandably argue that poor people generally do not have the same prospects of successful health outcomes as do the non-poor, for all sorts of reasons: For example, poor people may not be able to afford their medications and they may have difficulty finding reliable transportation for follow-up visits. Therefore, hospitals are less likely to receive performance-based incentive payments and, where applicable, more likely to be assessed performance-based penalties.
These providers respond to this perceived dilemma by proposing that the performance metrics used in the incentive programs be adjusted to reflect the demographic characteristics of their respective patient bases. This idea has even been endorsed by the influential National Quality Forum. DHHS isn’t so keen, though. The agency believes a system that encourages better outcomes from hospitals and providers that treat well-off patients (and by implication, worse outcomes from those that treat more poor people) will exacerbate the “second class care” problem that afflicts health care services targeted at the poor.
I get both sides of the debate. On the one hand, you don’t want to “penalize” providers that see a disproportionate number of poor patients – the result of that can only be to reduce the availability of health care services for those patients. On the other hand, you don’t want to reward providers for providing an inferior level of care to those patients. It strikes me that this might be an area for which a compromise is warranted: Incentivize hospitals and providers to strive to provide the highest level of care to all patients, including the poorest ones.
So keep the performance-based incentive standards where they are. But let’s also reward providers for seeing more and more poor people. Perhaps DHHS could think about an incentive to encourage that sort of patient mix – not enough to give the providers a huge windfall, but enough so that if they see a patient mix heavily populated with poor patients, and obtain relatively successful outcomes, their performance-based incentive payment would be substantially more than the one earned by a provider with a more typical (and thus richer) patient roster.