Hospitals Participating In Medicare Pay-for-Performance Pilot Project Improving Quality, Reducing Costs, CMS Says

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Public Health
Article Date: 05 Feb 2008 - 5:00 PDT

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Hospitals participating in a Medicare pay-for-performance demonstration project have been successful in lowering costs while reducing patient mortality and improving in other quality measures, officials said on Thursday, CQ HealthBeat reports. The project, a partnership between CMS and the hospital consortium Premier, involves 250 hospitals, which report on 30 clinical quality measures.

Hospitals participating in the project reported that the median hospital cost per patient decreased by $1,000 during the first three years, while the median mortality rate decreased by 1.87%. If all hospitals in the nation were to achieve the same cost and mortality improvements, hospital costs could be reduced by more than $4.5 billion annually, and about 70,000 deaths per year could be prevented, according to CMS.

Blair Childs, senior vice president of public affairs at Premier, said that the project shows that "pay for performance clearly is an added ingredient that makes a big difference. ... When you create a system like this that really becomes an engine for improvement, you can start adding in more things that improve the quality as well as the efficiency. It all translates, ultimately, to cost." CMS, which in February 2007 extended the demonstration project for an additional three years, has pledged $12 million in incentive payments to the 20% of hospitals that show the greatest improvements (Cooley, CQ HealthBeat, 2/1).

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