Earlier this year, the CMS extended the pilot another three years, retooling the incentive program to reward both top-performers and those hospitals showing significant improvement over previous years. One reason the incentive program was revamped was to take some of the competition out of an otherwise very collaborative process, Childs said.
Since its inception in October 2003, 26 hospitals have dropped out of the pilot program, according to Premier. Most departed because of mergers and acquisitions, catastrophes such as Hurricane Katrina or more work than they had volunteered to do, said Alven Weil, a Premier spokesman. He also noted that any hospital in the country can shadow the project without having to fulfill all of the validation and reporting requirements.
Hospitals that are participating in the project said the experience has been a catalyst for overall improvement regardless of any financial rewards. All five of the seven Fairview hospitals participating in the pilot have improved, although individual hospital performances varied, Page said. In the first year of the pilot, the five Fairview hospitals received approximately $250,000 in bonus paymentsabout half of what it could have earned if all the hospitals had been top performers in all areas, she said.
But we should make it very clear we are not participating to get extra money from CMS. Obviously we dont want to be penalized, but were a $2 billion revenue company and that amount of money is a pittance, Page said. Were participating to get focus and clarity around our improvement work. We believe that openness and transparency in healthcare data will improve healthcare.
Palomar Pomerado Health, a two-hospital system in San Diego, also maintained that more than the money, participation in the demonstration project was about preparation for the transformation coming in healthcare. It prepared us for really understanding how this evidence-based practice was going to be applied, said Opal Reinbold, chief quality officer for the system. Our goal was to make sure every patient got every intervention. We were much less focused on the public reporting or reward, but focused on (the realization) that this was following good patient care.
Palomar Pomerado is a top performer at a county, state and national level on Medicares Hospital Compare Web site, according to Reinbold. I believe one of the reasons were top is because we participated in this demo and weve been comparing ourselves to the top decile all along, she said. Performance for all hospitals gets better each year, so its a moving target.
Imminent or not, some hospitals and health systems are gearing up for the change independent of the CMS initiatives. Pay-for-performance for us is an outcome, not the starting point, said Peter Fine, president and chief executive officer of Banner Health. Weve been on our own journey for clinical performance improvement and safety for about six years.
Spread across seven Western states, Banner has so far invested more than $100 million in information technology tools alone in order to have an electronic medical record implemented across the system by the end of 2008, Fine said. A disrupting process aimed to change the organizations mindset, the automation marks an attempt to standardize processes across the system and achieve results on a systemwide basis.
We are definitely getting ready for (value-based purchasing). We are looking at that as one piece of a broad set of market forces that reward clinical performance excellence, said Hensing, Banners senior vice president. Its all about automation to improve reliability and standardization to learn from experience and develop new opportunities for improvement.
A Premier shareholder, Banner nevertheless is not participating in the Premier demonstration largely because the health system was on a different information system, Fine said. As a Premier board member, Fine said he has been monitoring the results of the demonstration project and Banner has compared very favorably.