Combined impact of Medicare's hospital pay for performance programs on quality and safety outcomes is mixed

Three major hospital pay for performance (P4P) programs were introduced by the Affordable Care Act and intended to improve the quality, safety and efficiency of care provided to Medicare beneficiaries. The financial risk to hospitals associated with Medicare's P4P programs is substantial. Evidence on the positive impact of these programs, however, has been mixed, and no study has assessed their combined impact. In this study, we examined the combined impact of Medicare's P4P programs on clinical areas and populations targeted by the programs, as well as those outside their focus.

We used 2007-2016 Healthcare Cost and Utilization Project State Inpatient Databases for 14 states to identify hospital-level inpatient quality indicators (IQIs) and patient safety indicators (PSIs), by quarter and payer (Medicare vs. non-Medicare). IQIs and PSIs are standardized, evidence-based measures that can be used to track hospital quality of care and patient safety over time using hospital administrative data. The study period of 2007-2016 was selected to capture multiple years before and after introduction of program metrics. Interrupted time series was used to analyze the impact of the P4P programs on study outcomes targeted and not targeted by the programs. In sensitivity analyses, we examined the impact of these programs on care for non-Medicare patients.

Medicare P4P programs were not associated with consistent improvements in targeted or non-targeted quality and safety measures. Moreover, mortality rates across targeted and untargeted conditions were generally getting worse after the introduction of Medicare's P4P programs. Trends in PSIs were extremely mixed, with five outcomes trending in an expected (improving) direction, five trending in an unexpected (deteriorating) direction, and three with insignificant changes over time. Sensitivity analyses did not substantially alter these results.

Consistent with previous studies for individual programs, we detect minimal, if any, effect of Medicare's hospital P4P programs on quality and safety. Given the growing evidence of limited impact, the administrative cost of monitoring and enforcing penalties, and potential increase in mortality, CMS should consider redesigning their P4P programs before continuing to expand them.