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Financial penalty associated with a decline in hospital-acquired complications in Australia
Luke Slawomirski1, Petr Otahal1, Martin Hensher1
1Menzies Institute for Medical Research, University of Tasmania,17 Liverpool St (Private Bag 23), Hobart 7000 Tasmania, Australia.
Insights
A financial penalty in Australian public hospitals was linked to a significant reduction in hospital-acquired complications (HACs). This pay-for-performance (P4P) strategy demonstrated a notable decrease in patient harm, suggesting its effectiveness in improving acute care safety.
Area of Science:
- Health Services Research
- Patient Safety
- Health Economics
Background:
- Adverse events in hospitals are a global challenge.
- Evidence on pay-for-performance (P4P) for acute care safety is inconclusive.
- Financial penalties are increasingly used to incentivize quality improvement.
Purpose of the Study:
- To evaluate the impact of a financial penalty introduced in July 2018 on hospital-acquired complications (HACs) in Australian public hospitals.
- To analyze the association between financial incentives and the prevalence of 13 high-priority HACs.
- To assess the effectiveness of P4P in reducing inpatient harm.
Main Methods:
- Analysis of administrative data for nearly 20 million hospital separations (age >17) from January 2014 to June 2021.
- Utilized interrupted time series analysis with generalized least squares (GLS) and Bayesian structured time series models.
- Examined quarterly prevalence of 13 high-priority HACs per 1000 multi-day separations.
Main Results:
- A substantial decline in HAC prevalence was observed following the penalty's introduction.
- GLS models estimated a 17% decrease; Bayesian models estimated a 26% decrease in HACs.
- An estimated 98,970 fewer inpatients experienced HACs between July 2018 and June 2021 compared to the counterfactual.
Conclusions:
- Financial penalties are associated with a significant reduction in hospital-acquired complications.
- This study provides evidence supporting the effectiveness of P4P in reducing inpatient harm.
- Further research is recommended to explore contributing factors and local trends in HAC reduction.
Background:
Adverse events during hospital care are a global concern. The evidence for addressing unsafe acute care using pay-for-performance (p4p) is inconclusive.
Objective:
To examine association between the introduction of a financial penalty on 1 July 2018 and the prevalence of 13 high-priority hospital-acquired complications (HACs) in Australian public hospitals.
Methods:
Administrative data on every Australian public hospital separation (age >17 years) between 1 January 2014 and 30 June 2021 was used to analyse changes in quarterly HAC prevalence (per 1000 multi-day separations), standardized to the study population, using two interrupted time series methods: generalized least squares (GLS) with autoregressive moving average (ARMA) errors, and a Bayesian structured time series.
Results:
Just under 20 million separations took place over the study period with 947,057 (4.7%) (mean age 69 (SD: 18), 48% female) recording at least one HAC and 1,263,646 HACs overall. Our GLS model estimated a decline of 17% (95% CI 12 - 22%) in HAC prevalence associated with the introduction of the penalty. The Bayesian model estimated a 26% (23 - 29%) decline. Most of the decline occurred during a 12-month roll-in period. Results suggest that 98,970 fewer inpatients experienced a HAC from 1 July 2018 to 30 June 2021 compared to the modelled counterfactual.
Conclusions:
Implementation of a financial penalty was associated with a substantial decline in HACs. Few other p4p policies have been associated with reductions in inpatient harm. Future research should examine local HAC trends and investigate what other factors may have contributed to the change.
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