An Environmental Scan of Pay for Performance in the Hospital Setting: Final Report. Overall Design


Program sponsors said that coordinating and aligning their P4P programs with other P4P programs and hospital reporting requirements constituted one of the most important considerations in designing a successful program. They noted that hospitals are often overwhelmed with requests for disparate information from a variety of organizations, and that streamlining these requests is key to making program participation feasible. An article by Pham et al. (2006) noted that on average, hospitals face 3.3 reporting requirements from various entities which are typically not fully aligned and which create additional reporting burdens.

Sponsors underscored the importance of striving for a simple program design and avoiding a “black box” that is difficult to understand and explain. They also noted that simplicity helps to win over skeptics.

Although a number of sponsors had programs tailored to individual hospitals, they noted the administrative advantages of a standardized program design and implementation. They felt, however, that separate programs may be necessary for small, rural, and CAH hospitals to accommodate their distinct challenges related to performance scoring, such as small case volume, less-educated patient populations, different mixes of services and patients, and different pools of providers. 

Regional experimentation would allow various models of program design to be tested. For national programs, such as those that might be sponsored by a large insurer or CMS, sponsors felt a regional approach would allow for experimentation, which they saw as important for two reasons. First, several noted that health care is local and there are variations in infrastructure and patterns of care across regions; so, clinical areas that may be problems in one area may not be an issue in another area. As such, quality improvement may be best carried out through local initiatives that take into account local practices and organizational structures. Second, the best way to design a P4P program is not yet known (or there may be more than one best way, depending on the characteristics of the market). 

Finally, sponsors said it was important for them to keep abreast of CMS’ future actions to facilitate advance planning and allow them to align their own programs with those of CMS. 

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