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Raising the bar on care?

Luis Fábregas
| Monday, March 18, 2013, 10:29 a.m.

Imagine a health care world that values how well doctors and nurses communicate with patients. Or a world in which your hospital room is thoroughly clean and the hallways are quiet. Better yet, imagine a world in which hospitals are held financially accountable for what happens to patients.

Such a scenario is about to become a reality. Medicare, the health insurance program for people 65 or older, this month will start paying hospitals more — or less — based on two main factors.

Seventy percent of their score will be based on how they follow basic standards of care. For example, Medicare will look at things such as the percentage of surgical patients who received the correct antibiotic.

Thirty percent of the score will be based on how patients rate their hospital experience. So what you have to say in those questionnaires you fill out — or often ignore — at the end of a hospital stay will count. It will matter if you thought a nurse gave you a medication without an understandable explanation. If enough people express similar concerns, your hospital might pay for it.

It all sounds great, until you examine the dollar amount of Medicare's penalties and bonuses. The maximum amount any hospital could gain or lose is 1 percent of its regular Medicare payments.

Allegheny General Hospital, for example, faced a cut of just over one-tenth of 1 percent of its regular Medicare payments, or less than $100,000, in the first round of bonuses and penalties announced two weeks ago. UPMC Presbyterian, on the other hand, received a 0.19 percent bonus — roughly $1 million.

Granted, even a small loss can be significant for a financially strapped institution such as AGH, but are these penalties enough to make a difference?

Diane Frndak, the West Penn Allegheny Health System executive in charge of quality, said the penalty imposed on AGH could be considered “trivial” but it is motivating AGH and the system's four other hospitals to improve care.

“I don't want a bigger penalty to motivate us,” she said.

Clearly, the Medicare program is proof that someone finally understands the importance of quality, not volume. This is the latest movement to hit hospitals where it hurts. In the fall, Medicare began cutting payments to hospitals based on readmission rates. If too many patients wound up hospitalized within a month of being discharged, the hospital received a reduced payment.

Private insurers have established similar programs. Highmark's QualityBlue rewards hospitals if they show they've controlled readmissions or prevented hospital-acquired infections, which can be deadly. The money represents up to 3 percent of a hospital's total reimbursement.

Linda Weiland, a Highmark vice president, told me its program resulted in about 3,000 fewer infections and saved about $56 million in costs to treat them.

“Patients aren't being harmed,” she said. “Costs aren't escalating unnecessarily and people aren't dying because of these infections.”

We might not learn the true impact of the Medicare program for a few years. Despite the questionable size of penalties and incentives, it could be a step in the right direction. No one should pay hospitals and doctors if they fail to follow acceptable standards of care.

Luis Fábregas is a staff writer for Trib Total Media. He can be reached at 412-320-7998 or

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