Saving Lives With Hospital Incentives
November 10, 2012

Hospital Incentives Help Save Lives, New Study Finds

Lee Rannals for — Your Universe Online

Using incentives at hospitals could help to make a significant drop in the mortality rates for certain medical conditions, according to a new study published in the New England Journal of Medicine.

Researchers found the controversial pay-for-performance schemes actually may help to save lives of North West England patients.

The team examined how the introduction of a scheme that paid bonuses to hospitals based on measures of quality affected the delivery of care.

"Researchers have generally concluded that paying bonuses to hospitals for improving quality of care does not affect patient health," lead author Matt Sutton, Professor of Health Economics in The University of Manchester's Institute for Population Health, said in a statement. "We examined a unique initiative in which a bonus system from the U.S. was adopted only in North West of England."

He said  they found while research has shown the U.S. scheme had no effect on patient health, the same scheme in North West England did work, and resulted in 890 lives being saved during the 18-month scheme.

The team suggested the reason for the scheme working is the bonuses in the U.K. were larger than those tried out in the U.S., and there was also a greater probability of earning a bonus.

They said despite the competitive nature of the program, staff met regularly within the region to share problems and ideas of best practice.

In the U.S., these schemes are voluntary and only 5 percent of hospitals take part, whereas all hospitals in North West of England took part of the pay-for-performance scheme.

The scheme is the first of its kind in England, and the initiative required each hospital to submit data on 28 quality measures concerning five clinical conditions.

Researchers examined mortality rates for three of the five specified clinical conditions including pneumonia, heart failure and myocardial infarction.

They combined the figures for in-hospital deaths within 30 days of admission in the 18 months before and after the scheme's introduction.

The team found that all three conditions combined for a 1.3 percent decrease in mortally, or 6 percent relative reduction. The study concludes the possibility of incentive having a "substantial" effect on reducing deaths in North West England hospitals could not be ruled out.

"Pay-for-performance schemes are being widely adopted, yet until now there's been little evidence that they improve patient outcomes," co-author Ruth McDonald, Professor of Health Innovation and Learning at Nottingham University Business School, said in a statement. "Our findings suggest they can make a positive and significant difference but that, whether they do so, depends very much on how they're designed and implemented."

Performance bonuses were paid out at the end of the first year totaling $5.1 million. Another $2.5 million was paid out the following six months.

A nationwide pay-for-performance system based on withholding payments rather than bonuses is now operating at all hospitals in North West England.

"These schemes can seem very simple on paper, but in practice they can be very difficult to implement successfully," McDonald said in the statement. "All of this suggests that how these schemes are put into practice and the context in which they're introduced can be crucial to patient outcomes."