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CLINICIAN to CLINICIAN

Pay for performance: Where are we heading?

The concept that an organization should be rewarded based on how well it performs is not new. Over the past few years, we've seen increasing scrutiny on the quality of care health care organizations provide. In short, there has been a shift away from volume and toward quality.

This is a shift I wholeheartedly embrace.

Quality improvement leadership

In the past year, I and other Allina leaders have written and spoken a lot about the need to constantly improve the quality and safety of the care we provide. I'm proud of the improvements we've made in reducing, identifying and learning from adverse events, increasing the number of patients receiving optimal care for core measures and increasing our focus on preventive care and wellness.

These are the kinds of activities we will be seeing more of from health systems around the country, and I feel Allina has a significant head start on much of this work. As the largest provider of health care services in Minnesota, we have both the breadth of expertise and the obligation to lead in quality improvement.

And it's a good thing we have that head start, because payers, employers and consumer groups alike are ratcheting up the pressure on providers to do more to close what the Institute of Medicine calls "the quality chasm."

Higher standards of accountability

In the past six weeks or so alone, a series of major announcements has shown organizations like Allina that change is coming fast, and that we will be held to a higher standard of accountability than ever before.

New Medicare, Medicaid reimbursement system

First, the Center for Medicare and Medicaid Services (CMS) announced that on October 1 it would be instituting a completely new set of diagnosis related groups, or DRGs, that are used by hospitals to code for conditions and bill Medicare for our services. The new coding system allows us to more effectively record complications and co-morbidities, which, under the new system, will play a larger role in determining the reimbursement we will receive.

As a component of the new system, next year CMS will also require hospitals to document and report on eight adverse events, e.g. surgical events (wrong site/wrong procedure), falls, ulcers, and certain hospital acquired infections. The occurrence of any of these will result in no reimbursement from Medicare for care related to the event.

These changes are designed by CMS to raise the level of accountability for organizations like ours to provide the right treatment based on the patient's needs, as well as to do everything we can to prevent unnecessary harm to patients under our care. While I strongly believe the most powerful motivator caregivers have to provide safe care is an intrinsic one, CMS is using the power of the purse to make it happen.

No charge for preventable medical errors

Then, just the other day, Minnesota went even further. On September 18, Governor Pawlenty and the Minnesota Hospital Association announced a statewide billing policy for care made necessary by preventable medical errors.

Under the agreement, hospitals in Minnesota will not bill insurance companies, Medicare or Medicaid, or others for care related to any of the 27 adverse health events that are reportable under Minnesota's Adverse Health Event reporting law.

This new state-wide policy is consistent with long-standing Allina practice of not billing for adverse events. But it is another reminder that payers and patients are engaged in these issues, and are going to increasingly demand high quality, safe treatment, and they are going to use financial incentives to do it.

Moving in the right direction

To me, this shows that the system is moving in the right direction.

I understand that standards like this are not always easy to implement. For example, in some cases it may be difficult to distinguish between care that is made necessary by an adverse event and care that is not, such as cases in which a patient develops subsequent complications. But I believe we can deal with these situations, and I think all of us as clinicians can support anything that holds us to a high standard of safety and quality.

I don't know what the next announcement will be, but I'm sure the pressure to provide the safest, highest quality care will only continue to increase. And to that I say, anything that advances our mission of providing exceptional care to our patients is welcomed. What do you say?

What do you say?

I welcome your thoughts and observations. Please e-mail me.  

First published: 09/27/2007
Last updated: 09/27/2007

Reviewed by: Penny Ann Wheeler, MD, chief clinical officer, Allina Hospitals & Clinics