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Quality Measurement of German Hospitals

Public reporting of hospital quality of care could improve the care patients receive through at least two pathways. First, patients (or their physicians) could send patients to higher quality hospitals (i.e., the selection pathway). Alternatively, hospitals themselves could have behavioral responses to the metrics and may improve quality of care in response to public reporting (the change pathway). A key question is, how well does public reporting of quality of care actually improve outcomes.

This is the question that a recent Health Affairs paper by Bayindir and Schreyögg (2023) aim to answer. The authors begin with a nice summary of the disappointing results to date of hospital value-based purchasing in the US:

Quality of care of German hospitals public reporting has led to modest improvements in health outcomes at best, (Ryan et al. 2012) and improvement has been very slow. (Levine et al. 2016, Chassin 2013) In addition, different payment models have not been effective in achieving quality improvements.(Papanicolas et al. 2017, Frakt et al. 2018) The Hospital Value-Based Purchasing Program, which adjusts Medicare payments to hospitals according to the quality of care provided by the hospitals, has not led to meaningful quality improvements and has negatively affected safety-net hospitals.(Hong et al. 2020, Carroll et al. 2021) Furthermore, among the fifty-four models launched by the Center for Medicare and Medicaid Innovation since its inception in 2010 with the aim of reducing costs while preserving or improving the quality of care, the vast majority have led to neither cost savings nor improvements in quality.(Smith 2021) The ineffectiveness of the implemented policies has prompted criticism of the limitations of measure-focused approaches in achieving quality improvement.(McWilliams 2020)

In Germany, the vast majority of individuals (88%) are covered by statutory health insurance–which is financed independent statutory health insurance funds–whereas only 9% is privately insured. The system is finances through an income tax. All employed people earning less than a set threshold (i.e., the opt-out threshold), individuals receiving welfare benefits, and pensioners have mandatory statutory health insurance. Dependents are insured free of charge. High income and self-employed people can choose between statutory health insurance and private health insurance. Most relevant to this paper is that Since 2004, all German acute care hospitals have been obliged to report structural, process, and outcome indicators as part of a national quality monitoring program [see Pross et al. (2017)] for more details). German hospitals are reimbursed on a per-admission basis using diagnosis-related groups (DRGs), similar to the U.S.

Using 2012-2019 quality reporting data from the Federal Joint Committee (Gemeinsamer Bundesausschuss, G-BA) and staffing information from the Federal Statistical Office of Germany (Statistische Ämter des Bundes und der Länder), the authors examined whether a hospital’s change in quality categories from one year to the next was associated with the hospital’s baseline quality category. This approach aims to test if quality metrics work through the “change pathway”. The authors also perform a difference-in-differences approach hypothesizing that hospitals in monopoly or oligopoly markets would be less responsive to low quality measures than hospitals in more competitive markets.

Using this approach, the authors find that:

On average, significant shares of hospitals of low and high quality moved to the average quality category for all indicators we considered. However, in general, low-performing hospitals were more likely than high-performing hospitals to become average quality. This supports the hypothesis that low-quality hospitals are more likely to engage in quality benchmarking, whereas for high-quality hospitals, preserving reputation and altruistic motives are also important. Becoming understaffed as a result of an increase in patient demand did not explain the decline in the quality of high-performing hospitals…We examined whether quality improvement was associated with an increase in patient volume and did not find a significant association

While the results do seem to show that quality metrics can be used to improve quality at hospitals, some of this phenomenon could just be regression to the mean. Nevertheless, it would be interesting to learn more about why quality metrics seems to have a larger impact in Germany than in the US. The authors claim that “intrinsic motivation” may play a large part in this as the German quality measures are not linked to value-based reimbursement, whereas in the US there is this linkage. Some could interpret this results as showing that quality measures do work; others that value-based payment does not work, but quality reporting is helpful. Regardless, more research is needed.