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The Michigan surgical quality collaborative: will a statewide quality improvement initiative pay for itself?
Michael J Englesbe1, Justin B Dimick, Christopher J Sonnenday
1Department of Surgery, University of Michigan, Ann Arbor, MI 48109, USA.
Objective:
In this article, we detail a unique collaboration between hospitals in Michigan and a major third party payer, using a "pay for participation model." The payer has made a significant investment in this regional surgical quality improvement (QI) program and funds each center's participation.
Results:
Based on the documented costs and incidence of surgical complications at our center, we estimate that a 1.8% annual reduction in complication rates is required for the payer to recoup its investment in this regional QI program. If we achieve our goal of a 3% reduction in complications per year over the 3-year program, the payer will save $2.5 million in payments. Our findings suggest that only a very modest improvement in surgical results, of a magnitude that seems realistically achievable based on similar QI initiatives, is necessary to financially justify payer involvement in a statewide quality improvement initiative.
Conclusion:
The framework of this program should be used by surgeons to attract private payers into QI collaboratives, facilitating improved patient outcomes and decreased health care expenditures.
Insights
A pay-for-participation model incentivizes surgical quality improvement (QI) programs. Modest complication rate reductions can financially justify payer investment, leading to better patient outcomes and lower healthcare costs.
Area of Science:
- Health Services Research
- Surgical Quality Improvement
- Healthcare Economics
Background:
- Regional surgical quality improvement (QI) programs require significant investment.
- Third-party payers are exploring innovative funding models for QI initiatives.
- A "pay for participation" model offers a unique approach to funding QI.
Purpose of the Study:
- To detail a novel collaboration between Michigan hospitals and a third-party payer using a pay-for-participation model.
- To assess the financial viability of payer investment in a regional surgical QI program.
- To demonstrate how payer involvement can drive improved surgical outcomes and reduced healthcare expenditures.
Main Methods:
- Implementation of a "pay for participation" model funded by a major third-party payer.
- Investment in a regional surgical quality improvement (QI) program across multiple hospitals.
- Analysis of documented costs and surgical complication rates to determine financial return on investment.
Main Results:
- An estimated 1.8% annual reduction in complication rates is needed for the payer to recoup investment.
- A 3% annual reduction in complications over 3 years could result in $2.5 million in payer savings.
- Modest, achievable improvements in surgical results can financially justify payer engagement in QI.
Conclusions:
- The pay-for-participation framework can attract private payers to QI collaboratives.
- This model facilitates improved patient outcomes and reduced healthcare spending.
- Surgeons can leverage this framework to foster collaborative quality improvement initiatives.
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