A pay-for-performance program that pays hospitals bonuses for hitting quality targets failed to achieve their goal of improving patient outcomes, according to a large, long term study.

Researchers found little evidence that the government’s new national plan, a mandate under the Affordable Care Act, to pay hospitals based on how they perform improved patient outcomes, specifically, 30-day mortality rates, according to a study published on Wednesday in the New England Journal of Medicine. 

"It really didn't move the needle very much on patient outcomes," study lead author Ashish Jha, a professor at the Harvard School of Public Health, told Reuters. "There was no evidence that patient outcomes got better under this different financing scheme."

The study lasted from 2003 to 2009 and compared 252 hospitals participating in the Medicare Premier Hospital Quality Incentive Demonstration (HQID), a joint effort between the Centers for Medicare & Medicaid Services and nonprofit hospitals, to other 3,363 nonparticipating hospitals. 

Jha and his team looked at Medicare data for 30-day mortality on a quarterly basis for patients with ICD-9 codes corresponding to acute MI, congestive heart failure, pneumonia, and CABG surgery in both hospital groups.  By 2009, the analysis included more than 137,000 patients in hospitals participating in the program and 1.07 million patients in other institutions.  The average age for patients 80 and most had some significant comorbidity.

The program gave hospitals in the top 20 percentile 1 or 2 percent bonuses in Medicare payments and penalized 1 to 2 percent in Medicare payments to hospitals that were in the bottom 20 percent. 

The findings show that mortality rates were in both groups were similar regardless of whether hospitals participated in the Premier HQID program, and there was a slight drop in mortality rates for patients who had heart attacks, congestive heart failure or pneumonia, or who underwent coronary-artery bypass surgery in both groups.

Researchers noted that the findings so not necessarily mean that the concept of pay-for-performance is useless, but suggest that the design of the program’s incentives should be reassessed. 

"We found little evidence that participation in the Premier HQID (Hospital Quality Improvement Demonstration] program led to lower 30-day mortality rates, suggesting that we still have not identified the right mix of incentives and targets to ensure that pay for performance will drive improvements in patient outcomes," Jha and colleagues wrote.

"Even though Congress has required that the [Centers for Medicare and Medicaid Services] adopt pay for performance for hospitals, expectations with regard to programs modeled after Premier HQID should remain modest," they added.

However the Premier Senior Vice President Blair Childs told Kaiser Health News that mortality rates are not the only goal of the government’s new incentive program.

"The goal of HQID was to determine whether incentives would improve care processes in hospitals and it did do that, there's no question," Childs said.

Childs agreed with researchers from the latest study that focusing on these “processes” like how hospital staff performed particular procedures like giving heart attack patients a beta-blocker on arrival and discharge, which the program’s hospitals actually surpassed the other hospitals’ performance, may not be the best was to actually improve patient outcomes. 

He told Kaiser Health News that the Premier is currently working on a project called Quest that has found that a better way to reduce patient death is to focus on preventing septic shock, when the patient’s blood is infected with bacteria, as well as respiratory conditions like pneumonia in patients on ventilators.

“The Premier demonstration was an effort under the last Administration, separate from the value-based purchasing model that we’re implementing into Medicare’s hospital payment system. Our model for improving quality in hospitals is much more aggressive, covering all hospitals and including both incentives for hospitals that do well on quality metrics, and consequences for hospitals that do not improve,” the Centers for Medicare & Medicaid Services said in a statement. 

Processes measurements will account for 70 percent of incentives and patient satisfaction will make up 30 percent for hospitals in the first year of Medicare’s incentive program in 2012, but next year Medicare will include mortality rates for heart failure, heart attack and pneumonia together with the existing measurements.

The government agency hopes to eventually tie hospital payment to actual outcomes, but the process measures will still account for a big part in judging hospital performance.

Jha suggests that one of the reasons why the program failed to improve mortality rates was because hospitals do not have enough financial resources. 

"If you have much higher-than-expected mortality rates," he told Reuters, "maybe you shouldn't still get 99 cents on the dollar?"

Chas Roades, chief research officer at The Advisory Board Co. consulting firm believes that Medicare’s new program will improve quality of patient care in the long-term, but warned that it may take some time before there are clear results.

“Like most of these kinds of quality improvements, I think the early gains are going to be the very low performers, and less about the top performers improving even more,” he told Kaiser Health News. “What I think it will do in the reasonably near term is reduce the spread between the worst performers and the best performers, mostly by pulling up the bottom.”