First-year results from the pay-for-performance Hospital Quality Incentive Demonstration, a partnership between Premier Inc. healthcare alliance and CMS, show a 6.6% average improvement across five clinical areas for the 260 participating hospitals--a greater rate of improvement than shown in other national hospital performance initiatives. Most notably, quality improvements in the care of acute myocardial infarction patients saved approximately 235 lives, according to the white paper released by Premier.
The three-year demonstration, launched in July 2003, was designed to determine whether economic incentives paid through Medicare to hospitals are effective at improving the quality of inpatient care. Hospitals that perform in the top 10% for a particular clinical area receive both a financial reward and an extra 2% bonus on Medicare reimbursement for that clinical area. Hospitals performing in the second decile receive a 1% bonus. In the first year of the project, five hospitals performed in the top 20% for all five clinical areas. CMS awarded $8.85 million in Medicare incentives to the top-performing hospitals.
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