Do hospitals alter patient care effort allocations under pay-for-performance?

Area of Science:

• Health Services Research
• Healthcare Economics
• Quality Improvement

Background:

• Pay-for-performance (P4P) programs incentivize hospitals to improve quality metrics.
• A potential concern is that hospitals may focus on easier tasks to boost scores, rather than addressing more complex quality issues.

Purpose of the Study:

• To investigate whether hospitals adjust their efforts, prioritizing easier tasks over difficult ones, in response to pay-for-performance (P4P) financial incentives.
• To analyze hospital behavior in allocating resources towards quality improvement initiatives.

Main Methods:

• Utilized Centers for Medicare and Medicaid Services Hospital Compare data (FY2003-2005) and American Hospital Association data (2003).
• Classified quality measures as 'easy' or 'difficult' to improve based on associated per-patient costs.
• Employed random effects regression to compare process compliance on easy versus difficult tasks in P4P-eligible hospitals versus public reporting hospitals.

Main Results:

• Hospitals with P4P incentives showed no preferential increase in effort for easy tasks in heart failure or pneumonia care.
• A modest increase in effort for easy tasks was observed for heart attack admissions.
• No systematic evidence indicated a strategic shift of effort towards easier processes of care.

Conclusions:

• Hospitals demonstrated limited response to P4P incentives regarding the allocation of effort across tasks of varying difficulty.
• The study found little evidence that hospitals strategically altered their efforts to maximize scores under P4P as hypothesized.
• Alternative incentive designs may be necessary to elicit a more substantial response from hospitals.