An Environmental Scan of Pay for Performance in the Hospital Setting: Final Report. Program Evolution


  • Measures. Looking forward, many sponsors (11/20) plan to expand and/or modify the measure sets they are currently using. They anticipated including more measures in one or more of the following areas: 

    • Expanded clinical processes: Some sponsors noted that current performance is “topping out” on the measures that are part of existing measure sets. Consequently, they plan to expand the metrics they track to include areas that have received less attention to date, such as measures of surgical infection prevention and other new areas being added to RHQDAPU. 
    • Clinical outcomes: Sponsors indicated that they want to shift the focus of their programs to include health outcomes, as opposed to solely using process measures, currently the primary focus of most programs.
    • Patient experience: Given CMS’ requirements to collect the Hospital CAHPS (HCAHPS) data starting in 2007 (with public reporting in 2008) as part of its RHQDAPU program, many sponsors foresee moving to this survey in the near future ( ). 
    • Resource use/efficiency: There was significant interest in this area but a lack of sound metrics, according to sponsors. As reliable and valid measures are developed, sponsors plan to make this area a larger part of their programs.  Sponsors emphasized the need to ensure that programs are both “broad and deep” in terms of metrics. They noted, however, that achieving this goal is a challenge because they seek not to overburden hospitals with extensive data collection and submission requirements.
  • Other Modifications. In addition to the changes to measures noted above, sponsors anticipated increasing selected aspects of their programs, such as: 
    • The number of hospitals participating in the program: Sponsors anticipate including more hospitals in their P4P programs as contracts come up for renewal. They noted that non-participating hospitals were beginning to feel pressure to sign up for the programs.
    • The amount tied to performance: Sponsors plan to increase the magnitude of the financial incentive that is tied to performance as they update their contracts with hospitals. In at least one case, a sponsor plans to begin tying payments to both inpatient and outpatient hospital services and was in the planning stages of developing outpatient hospital performance measures.
    • The level of consumer engagement: Increasingly, employers demand that the health systems with which they contract encourage consumer VBP through full disclosure of hospital performance. In response, some sponsors intend to incorporate “tiering” or other similar mechanisms into their programs as a way to encourage consumers to seek care from high-performing institutions.

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