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P4P project with Medicare led to lower hospital costs, decline in mortality rates

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A recent study by Premier Inc (Pay-For-Performance Study), shows correlation between high levels of compliance with best practices and lower clinical costs, writes Health Leaders Media.

Two examples from this study were pneumonia and heart bypass surgery patients. Results from both groups of patients suggest that the more compliant the care received, as measured by adherence to patient process measures, the lower the average hospital costs for treating those patients.

Hospitals achieving high compliance, as defined by meeting 75 percent to 100 percent of the patient process measures for treating patients with pneumonia, saw an 18 percent decrease in average hospital costs compared to those hospitals in low compliance, as defined as meeting 0 percent to 25 percent of patient process measures. A similar trend was observed for heart bypass surgery patients.

In addition, this study demonstrated that adhering to the patient process measures reduced costs and decreased both patient mortality rates and the average length of stay. The study of more than 1.1 million patient records from participating hospitals concludes the nation could save $4.5 billion and nearly 70,000 lives annually if all hospitals implemented the program and achieved the same results.

Under pay-for-performance programs, patients can compare the care offered at various hospitals based upon clearly defined and standardized metrics.

The Centers for Medicare and Medicaid Services (CMS) and Premier Inc. joined forces in 2003 to launch the Hospital Quality Incentive Demonstration Project (HQID), the first national Pay-for-Performance demonstration of its kind. Five clinical conditions were studied: heart bypass (coronary artery bypass graft (CABG)), heart attack (acute myocardial infarction (AMI)), pneumonia, hip and knee replacement, and heart failure. Building on early findings from the HQID project, which showed dramatic quality improvements across the board, Premier undertook an additional, extensive analysis in the Performance Pays study to examine the relationship between quality and cost. The Centers for Medicare & Medicaid Services has extended the demonstration through 2009.

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