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[ Recorded presentation ] Recorded presentation

An evaluation of a hospital-based financial incentive program in Michigan

Karen M. Sautter, MPH1, Jack Wheeler, PhD2, Bert White, MBA, DMin1, Barbara G. Bokhour, PhD3, Dan R. Berlowitz, MD, MPH3, James F. Burgess Jr., PhD4, and Gary J. Young, JD, PhD1. (1) Health Services Department, Boston University School of Public Health, 715 Albany Street, Talbot Building, 3 West, Boston, MA 02118-2526, 857-364-4097, Karen.Sautter@med.va.gov, (2) Department of Health Management and Policy, University of Michigan School of Public Health, 109 S. Observatory, M3138 SPH II, Ann Arbor, MI 48109-2029, (3) Health Services/ Center for Health Quality, Outcomes & Economic Research, Boston University School of Public Health, ENRM Veterans Hospital, 200 Springs Road (152), Bedford, MA 01742, (4) Department of Veterans Affairs, Management Science Group, ENRM Veterans Hospital, 200 Springs Road (152), Bedford, MA 01742

This study evaluated the effect of a health plan-sponsored hospital-based financial incentive program for improving quality, focused on heart failure quality indicators. We conducted hour-long semi-structured group interviews with senior managers and cardiologists at ten hospitals involved in the Participating Hospital Agreement (PHA) program implemented by Blue Cross Blue Shield of Michigan (BCBSM). Under PHA, hospitals are eligible for an annual incentive payment of up to 4 percent of BCBSM's DRG-based inpatient claims based on performance in patient safety, community outreach, and selected quality indicators. Interviews focused on knowledge, perceptions, and impact of pay-for-performance strategies. We compared BCBSM-provided data on heart failure quality indicators between 2002 and 2004 with our qualitative findings. Preliminary analyses suggest that providing hospitals with financial incentives to improve quality may be an effective approach in motivating hospital administrators to pursue, implement, and enhance targeted quality improvement programs. Since cardiologists mostly are unaware of incentives, the PHA program effect occurs primarily at the management level and influences decision-making regarding quality improvement resource allocation. Evidence suggests that incentives may not change the practice behavior of cardiologists, but lead to changes at the systems level. Hospital-based pay-for-performance programs may enable smaller hospitals to implement quality improvement programs that would otherwise be financially prohibitive. Programs that do not directly incent physicians to change their practice behavior but assist physicians in providing appropriate care through hospital infrastructure changes may be effective in improving overall hospital performance. Further research on using hospital-based incentives to improve adherence to evidence-based guidelines is needed.

Learning Objectives:

Keywords: Health Care Quality, Hospitals

Presenting author's disclosure statement:

Any relevant financial relationships? No

[ Recorded presentation ] Recorded presentation

Advances in Health Systems Research: Methods and Applications

The 134th Annual Meeting & Exposition (November 4-8, 2006) of APHA