A Medicare pay-for-performance pilot program that rewards hospitals based on quality has "steadily improved the quality of patient care," according to the latest results from the three-year program, the New York Times reports (Abelson, New York Times, 1/25). The demonstration project, which launched in October 2003, includes about 260 hospitals in 38 states (Kaiser Daily Health Policy Report, 6/22/06). Under the program, hospitals can earn bonuses if they rank among the top 20% in providing specified treatments in at least one of five areas of patient care: joint replacement, coronary artery bypass graft, heart attack, heart failure and pneumonia. According to the data, participating hospitals overall experienced nearly 1,300 fewer deaths in treating heart attack patients, and they generally have scored higher on quality measures than other U.S. hospitals. CMS officials on Friday will announce performance bonuses of $8.7 million to 115 hospitals that were the top performers based on 30 quality measures in the second year of the project. Premier, a not-for-profit hospital alliance, is managing the program. CMS and Premier have begun discussions about whether to extend the project as "Congress has also asked Medicare to look into developing a new payment system that would put more emphasis on rewarding the best care," the Times reports.

Questions on Methods
Some hospitals participating in the project say that its bonus assessment method "is not the best model for a nationwide system," the Times reports. Some hospital administrators say the program focuses too much on whether certain treatments are delivered rather than considering improvements in patient outcomes, according to the Times. Charles Riccobono, the chief quality officer for Hackensack University Medical Center in New Jersey -- which has earned top marks in all five areas of performance for the last two years -- said, "This isn't the system they will ultimately use for large-scale pay for performance." Herb Kuhn, acting deputy administrator for Medicare, said he is working with experts to address concerns about the system. Donald Berwick, president and CEO of the Institute for Healthcare Improvement, said, "I think it offers a lot of encouragement for the potential of linking even small amounts of pay to the reliability of care" (New York Times, 1/25).