The Effect of Phase 2 of the Premier Hospital Quality Incentive Demonstration on Incentive Payments to Hospitals Caring for Disadvantaged Patients
Article first published online: 14 MAR 2012
© Health Research and Educational Trust
Health Services Research
Volume 47, Issue 4, pages 1418–1436, August 2012
How to Cite
Ryan, A. M., Blustein, J., Doran, T., D. Michelow, M. and Casalino, L. P. (2012), The Effect of Phase 2 of the Premier Hospital Quality Incentive Demonstration on Incentive Payments to Hospitals Caring for Disadvantaged Patients. Health Services Research, 47: 1418–1436. doi: 10.1111/j.1475-6773.2012.01393.x
- Issue published online: 5 JUL 2012
- Article first published online: 14 MAR 2012
- Agency for Healthcare Research and Quality. Grant Number: 1 K01 HS018546-01A1
- Health economics;
- incentives in health care;
The Medicare and Premier Inc. Hospital Quality Incentive Demonstration (HQID), a hospital-based pay-for-performance program, changed its incentive design from one rewarding only high performance (Phase 1) to another rewarding high performance, moderate performance, and improvement (Phase 2). We tested whether this design change reduced the gap in incentive payments among hospitals treating patients across the gradient of socioeconomic disadvantage.
To estimate incentive payments in both phases, we used data from the Premier Inc. website and from Medicare Provider Analysis and Review files. We used data from the American Hospital Association Annual Survey and Centers for Medicare and Medicaid Services Impact File to identify hospital characteristics.
Hospitals were divided into quartiles based on their Disproportionate Share Index (DSH), from lowest disadvantage (Quartile 1) to highest disadvantage (Quartile 4). In both phases of the HQID, we tested for differences across the DSH quartiles for three outcomes: (1) receipt of any incentive payments; (2) total incentive payments; and (3) incentive payments per discharge. For each of the study outcomes, we performed a hospital-level difference-in-differences analysis to test whether the gap between Quartile 1 and the other quartiles decreased from Phase 1 to Phase 2.
In Phase 1, there were significant gaps across the DSH quartiles for the receipt of any payment and for payment per discharge. In Phase 2, the gap was not significant for the receipt of any payment, but it remained significant for payment per discharge. For the receipt of any incentive payment, difference-in-difference estimates showed significant reductions in the gap between Quartile 1 and the other quartiles (Quartile 2, 17.5 percentage points [p < .05]; Quartile 3, 18.1 percentage points [p < .01]; Quartile 4, 28.3 percentage points [p < .01]). For payments per discharge, the gap was also significantly reduced between Quartile 1 and the other quartiles (Quartile 2, $14.92 per discharge [p < .10]; Quartile 3, $17.34 per discharge [p < .05]; Quartile 4, $21.31 per discharge [p < .01]). There were no significant reductions in the gap for total payments.
The design change in the HQID reduced the disparity in the receipt of any incentive payment and for incentive payments per discharge between hospitals caring for the most and least socioeconomically disadvantaged patient populations.