Hospital alliance Premier came up 21 hospitals short of expectations when it closed enrollment last week for the groundbreaking pay-for-performance demonstration project it launched last July with the CMS. But CMS Administrator Tom Scully already is discussing an expansion to every hospital in the nation if he gets his way.
"We may do some kind of project for non-Premier hospitals," Scully told Modern Healthcare last week. "A lot of organizations are clamoring to do what Premier is doing ... I would like to see 5,000 hospitals participating in (the Premier project), but obviously we don't have the legislative authority to do more than a demonstration project. This is the right way to go."
At the close of the three-month enrollment period on Nov. 24, Premier officials reported that 279 hospitals had agreed to take part in the seminal project. The program, announced in July, will reward top performing hospitals with public recognition and added dollars in an attempt to ascertain whether economic incentives have a direct link to quality of care (June 30, p. 6). Under the project, hospitals in the top 10% in five clinical areas-coronary artery bypass graft, heart attack, heart failure, hip and knee replacement and pneumonia-will receive a 2% bonus Medicare payment. Hospitals in the second 10% will receive a 1% bonus.
Meanwhile, by the third year hospitals performing in the bottom 10% that show no improvement will be penalized with a 2% cut in Medicare payments.
Of the 279 hospitals that volunteered, 24 are non-Premier hospitals. Premier originally said it hoped to sign on as many as 300 hospitals. The hospitals volunteering to participate in the program were recruited from among the 470 hospitals that were subscribing to Premier's proprietary Perspective comparative database system as of March 31, 2003. Perspective is a fee-for-service repository that collects and then "scrubs" monthly clinical and financial data from hospitals to produce regular clinical performance reports that hospitals privately use for strategic purposes. About 15% of the hospitals participating in the service aren't among Premier's 1,500 members.
"Nobody knew how many hospitals might participate. But we always set high targets for ourselves. We're delighted that (279) hospitals have agreed to take part," Premier spokesman Hunter Kome said. "These hospitals are pioneers and deserve a ton of credit for their leadership."
Opting out of the program was not an option for the 11 hospitals that constitute the North Shore-Long Island Jewish Health System, said Yosef Dlugacz, senior vice president of quality management. The order came from the top of the Great Neck, N.Y.-based system. Dlugacz conservatively estimated that North Shore-Long Island could receive up to $2 million in bonus payments, but it's not about the money, he said. "We think we don't have a choice but to show we are better. In other words, CMS legitimized the process of quality management," Dlugacz said.
It also isn't about the money for 275-bed Rogue Valley Medical Center in Medford, Ore., said Mark Folger, executive vice president for two-hospital Asante Health System, Rogue Valley's parent. "It's a learning process for us. This is, I think, a wave of change that is not going to go away in terms of sharing (outcomes) with the community. I think it will help us improve our care. That's what we're going into it for."
The project now moves into the data collection phase, Kome said. The first data period started Oct. 1. Data on the top 50% hospitals in each clinical area will be publicly reported annually beginning in October 2004.