Hospitals Medicare P4P Quality

Is value-based purchasing working for hospitals?

The Incidental Economist is one of my favorite blogs to read.  This week’s post on a recent BMJ article on the failure of P4P did not disappoint.  The article (Figueroa et al. 2016) looks at 4267 acute care hospitals in the United States that participated in Medicare’s Hospital Value Based Purchasing (HVBP) system.  During my time at Acumen, I even helped to implement HVBP’s Medicare Spending per Beneficiary (MSPB) measure. Aaron Carroll of the Incidental Economist summarizes the findings below and his thoughts on P4P in general.

In the pay-for-performance hospitals, the mortality rates of the incentivized conditions dropped 0.13% in each quarter in the pre-intervention period in the study hospitals, compared to a drop of 0.14% in the control hospitals.In the post-intervention period, study hospitals dropped 0.03% each quarter compared to 0.01% in the control hospitals. This was not a statistically significant difference. In fact, there was no difference in any subgroup of hospitals.

I gave a talk last week to a bunch of hospital executives on how policy often fails to be evidence based. My last example was pay for performance. They seemed least likely to accept that example as correct.

It’s not that I think we can’t incentivize physicians to practive better. I’m sure we can. My problem is that we assume that we can pick an easy to measure metric (30-day mortality), tell everyone that this is the one to measure, that it translates into improved quality, and then expect results.


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