Latest results of the Premier Hospital Quality Incentive Demonstration (HQID) show dramatic across-the-board improvement in the performance of participating hospitals. Launched in October 2003 by the Centers for Medicare & Medicaid Services (CMS) and the Premier healthcare alliance, HQID involves about 250 hospitals in 36 states.

The demonstration was designed to test new payment systems under Medicare that would improve the safety, quality and efficiency of care delivered in the nation's hospitals. Given the series of reports issued over the past decade - starting with the Institute of Medicine's 1999 landmark report "To Err is Human" - there is a growing awareness and well documented need for Medicare to change the way it pays for health care services. The outcomes from the third year of this demonstration provide yet even more evidence that paying for performance in health care in these innovative Value-Based Purchasing (VBP) initiatives can dramatically improve the quality of health care delivered to hospital patients.

"These Premier results show that Value-Based Purchasing can achieve excellent results in Medicare," said CMS Acting Administrator Kerry Weems. "Given these results, it is time to take the next step and implement hospital Value-Based Purchasing for the Medicare program, so that citizens across the nation can benefit from improved safety and quality get the right care, every time."
In November 2007, CMS submitted a proposal to Congress to implement Medicare VBP. Within that proposal, a percentage of a hospital's payment for each discharge would be contingent on the hospital's actual performance on a specific set of measures. Currently, Medicare pays a set amount for each discharge, whereas under VBP, amounts would be linked to quality of services provided, not just quantity of service. Changing Medicare's hospital payment methodology to reflect CMS' implementation plan for VBP requires new legislation.

Hospitals participating in HQID include small/large, urban/rural, and teaching/non-teaching facilities that have volunteered to report their quality data for the following five high-volume inpatient conditions using national measures of quality care: acute myocardial infarction (AMI/heart attack); coronary artery bypass graft; heart failure; pneumonia; hip and knee replacement. More than 30 nationally defined, standardized, risk-adjusted measures representing process of care, and patient outcomes, are being tracked to evaluate whether the care provided consistently meets accepted evidence-based practice standards.

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