Providing financial incentives to healthcare providers to improve quality of care for patients is gaining in popularity, but little research has been done to ascertain whether this approach has the intended effect.

Only three hospital pay-for-performance programs have been evaluated, and good evidence was available for only one: the Hospital Quality Incentive Demonstration (HQID) adopted by the Centers for Medicare and Medicaid Services in 2003. At best, tesults were modest, and there was no improvement in mortality seen in the HQID program.

However, in 2008, a program called Advancing Quality, which is similar to the HQID program, was introduced in all 24 National Health Service hospitals in the northwest region of England. The program financially rewarded only the top performing hospitals, and a total of $5 million in bonuses was paid to hospitals at the end of the first year. Matt Sutton, PhD, of the Center for Health Economics at the University of Manchester, U.K., and colleagues examined the results of this program to determine whether paying for performance could reduce mortality rates in hospitals.


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The results of this study were recently published in the New England Journal of Medicine (2012;367:1821-1828). Data were collected from the hospitals for 18 months before and after the start of the program. Investigators focused on deaths that occurred within 30 days of admission for three conditions: pneumonia, acute myocardial infarction, and heart failure. The researchers compared mortality rates among 134,435 patients in the Advancing Quality program with 722,139 patients admitted for the same three conditions to the 132 other hospitals in England.

According to the researchers, the risk-adjusted absolute mortality for the three conditions in the Advancing Quality group decreased significantly by 1.3 percentage points for a relative reduction of 6%. This was equivalent to 890 fewer deaths during the 18-month period. Pneumonia patients had the most significant reduction in mortality.

The study authors were unsure about why the reductions in England were significant and those in the United States were not, but speculated that this may be due to larger bonuses and a greater investment by hospitals in quality improvement activities in the U.K. program. The researchers concluded that “details of the implementation of incentive programs and the context in which they are introduced may have an important bearing on their outcome.”