Medicare Compliance & Reimbursement

New quality measures may save $1.35 billion in hospital costs.

A little bit of mathematical detective work might be enough to convince the Centers for Medicare & Medicaid Services (CMS) to widen the reach of its hospital pay-for-performance (P4P) demonstration.

Premier Inc. collected a set of 33 quality indicators from more than 250 hospitals nationwide in its Hospital Quality Incentive Demonstration (HQID) in partnership with CMS. Premier, a health care alliance comprised of more than 200 leading non-profit hospitals and health care systems, applied the quality measures to a "what-if" analysis of hospital data from 2004 and released a report of its findings on Aug. 31.

According to Premier's analysis, if all pneumonia, heart bypass, heart attack, and hip and knee replacement patients nationwide had received 76 to 100 percent of a set of quality care processes in 2004, the results would have been:

• 5,700 fewer deaths;
• 8,100 fewer complications;
• 10,000 fewer hospital readmissions;
• 750,000 fewer days in the hospital; and
• $1.35 billion less hospital costs.

"Through our work with hundreds of hospitals across the nation, we have found that they are able to implement these care processes without a great deal of expense, new technology or staff time," Premier's president and CEO Richard A. Norling said in a statement.

This revelation is good news for hospitals, as Congress has ordered Medicare to "develop a plan to implement 'value-based purchasing,' which ties payment to quality of care and other outcomes, beginning with FY2009," the report says. Premier notes that its HQID is a test of just one "value-based purchasing" model.

"As the first real-world test of these quality measures, this project represents an important step forward in our understanding of the impact of process improvement on patient outcomes," Maureen Bisognano, executive vice president and chief operating officer of the Institute for Healthcare Improvement, commented in a statement.

For more information about the quality indicators that Premier tested, go to www.qualitydemo.com.