Payer leverage and hospital compliance with a benchmark: a population-based observational study

Area of Science:

• Health Services Research
• Health Economics
• Transplant Surgery

Background:

• Medicare reimbursement for organ transplants is linked to hospital performance benchmarks, including volume.
• Medicare's significant role in renal transplantation, due to end-stage renal disease coverage, provides a unique case study.
• Payer leverage can influence hospital compliance with transplant volume benchmarks.

Purpose of the Study:

• To examine the relationship between Medicare market share and hospital compliance with organ transplant volume benchmarks.
• To assess the impact of hospital volume compliance on patient-level operative mortality.
• To understand the role of payer leverage in motivating benchmark attainment in organ transplantation.

Main Methods:

• Analysis of nationally representative discharge data for kidney, liver, heart, and lung transplants (1993-2003).
• Logistic regression to assess the association between hospital volume compliance and Medicare market share.
• Generalized estimating equations to explore the link between operative mortality and hospital volume compliance.

Main Results:

• Medicare's market share varied significantly by organ type.
• Hospital compliance with volume benchmarks differed across transplant types, despite lower mortality at compliant centers.
• High Medicare market leverage was independently associated with compliance for kidney, heart, and lung transplants.

Conclusions:

• Payer leverage is a significant factor influencing hospital compliance with value-based purchasing initiatives.
• For less common procedures, a substantial patient "at-risk" proportion (e.g., 30%) may be necessary to incentivize compliance.
• These findings have implications for designing effective healthcare payment policies.