Health Affairs Health Tracking

Improving Safety And Eliminating Redundant Tests: Cutting Costs In U.S. Hospitals [Health Tracking]

Jha, A. K., Chan, D. C., Ridgway, A. B., Franz, C., Bates, D. W. — Tue, 08 Sep 2009 17:02:05 PDT

High costs and unsafe care are major challenges for U.S. hospitals. Two sources of raised costs and unsafe care are adverse events in hospitals and tests ordered by several different physicians. After reviewing rates of these two occurrences in U.S. hospitals and simulating their costs, we estimated that in 2004 alone, eliminating readily preventable adverse events would have resulted in direct savings of more than $16.6 billion (5.5 percent of total inpatient costs). Eliminating redundant tests would have saved an additional $8 billion (2.7 percent). Addressing these situations could generate major savings to the system while improving patient care.

Medicare's Policy Not To Pay For Treating Hospital-Acquired Conditions: The Impact [Health Tracking]

McNair, P. D., Luft, H. S., Bindman, A. B. — Tue, 08 Sep 2009 17:02:05 PDT

In 2008 Medicare stopped reimbursing hospitals for treating eight avoidable hospital-acquired conditions. Using 2006 California data, we modeled the financial impact of this policy on six such conditions. Hospital-acquired conditions were present in 0.11 percent of acute inpatient Medicare discharges; only 3 percent of these were affected by the policy. Payment reductions were negligible (0.001 percent, or $0.1 million—equivalent to $1.1 million nationwide) and are unlikely to encourage providers to improve quality. Options to strengthen the incentives include further payment modifications for hospital-acquired conditions or expanding the hospital-acquired condition policy to exclude payment for consequences, additional procedures, and readmissions.

Making The 'Pay' Matter In Pay-For-Performance: Implications For Payment Strategies [Health Tracking]

Werner, R. M., Dudley, R. A. — Tue, 08 Sep 2009 17:02:05 PDT

Although pay-for-performance (P4P) is being widely adopted, little is known about how different P4P strategies affect provider payment. These differences may be essential in motivating and maximizing quality improvement across all providers. We review hospitals’ P4P strategies and describe differences in payments by size of reward; payment differences between high- and low-performing providers; ability to reward improvement in the absence of high performance; and the percentage of payments based on performance. Bonuses vary considerably by payment strategy, which suggests that the strategy selected should vary depending on program goals. These findings are relevant to P4P for any type of provider.