Second-year results from a groundbreaking hospital value-based purchasing demonstration project show substantial improvement in quality of care, leading to incentive payments totaling $8,690,447 to 115 top-performing hospitals, the Centers for Medicare & Medicaid Services (CMS) has announced.

Participants in the Premier Hospital Quality Improvement Demonstration reported significant improvement in quality of care across five clinical focus areas measured by more than 30 nationally standardized and widely accepted quality indicators.

The average improvement in the project's second year was 6.7 percentage points, for total gains of 11.8 percentage points over the project's first two years.
"CMS has been considering the integration of quality and payment systems as a way to maximize the value of Medicare payments," said CMS Acting Administrator Leslie V. Norwalk, Esq. "These latest results provide one more piece of solid evidence that pay-for-performance works."

Launched in October 2003 by CMS and the Premier Inc. healthcare alliance, the value-based purchasing project is part of an overall shift in Medicare to pay based on value, not volume of services.

The first national project of its kind, the Hospital Quality Improvement Demonstration (HQID) is designed to determine if economic incentives to hospitals are effective at improving the quality of inpatient care.

"The Premier hospital demonstration is showing that even limited additional payments, focused on supporting evidence-based quality measures, can drive across-the-board improvements in quality, fewer complications, and reduced costs," said Norwalk .

"With results like these, which enable us to measure and improve the quality of care delivered to Medicare beneficiaries, tied to the public reporting of quality and pricing information that is easily accessible to consumers and providers, consumers will now have more tools than ever before to select providers that consistently deliver high quality, efficient care," Norwalk said. "At the same time, by paying for quality care, CMS supports hospitals, physicians, and other health care providers in their efforts to deliver the best care in the most efficient way possible."

The Premier project involves more than 250 hospitals across the nation, which submit data to Premier for validation and analysis. In turn, Premier submits the data to CMS.

Participating hospitals report process and outcome measures in five clinical areas - acute myocardial infarction (AMI), heart failure, coronary artery bypass graft (CABG), pneumonia, and hip and knee replacement and are scored based upon their performance in these clinical areas.

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