5 Ways to Make the Pay-for-Performance Transition Smoother

Medicare will soon begin reimbursing hospitals based, at least somewhat, on their performance. As such, hospitals will be compensated based on certain measures such as quality outcomes and readmission rates. Making the transition to pay-for-performance necessitates an entire culture change focused on the collaboration between hospital administration, physicians and staff. Here are five ways hospitals can make the transition smoothly.

1. Contract a commercial payor for quality.
To prepare for Medicare reimbursements tied to quality, hospitals can partner with a commercial payor to create a reimbursement agreement with ties to the hospital's quality performance, says Peggy Naas, MD, MBA, vice president of physician strategies at VHA. Learning from these pilots prepares the hospital for when Medicare implements pay-for-performance methods.

Furthermore, hospitals should discuss what elements are costing the most with commercial payors and then collaborate to create methods and benchmarks for assessing improvement in the quality of care. This gives hospitals time to focus on efficiencies and drive down costs outside of the system, says Hilton Raethel, who oversees the provider services department at Hawaii Medical Service Association.

2. Become involved in a collaborative. Join other community or national hospitals in cost and quality improvement collaboratives that shares data and benchmark best practices between facilities, says Richard Bankowitz, MD, enterprise-wide chief medical officer of Premier healthcare alliance. Hospitals in a collaborative share their benchmarking data and learn, among other things, how their physicians compare with others. "Sharing this data provides the motivation and friendly competition that's needed to generate a sense of urgency among the physicians to provide the best results," says Dr. Bankowitz. Among the collaboratives Premier currently runs, QUEST, a voluntary three-year project made up of approximately 200 hospitals across 34 states, focuses on helping participants achieve best management and care results.

Premier has utilized collaborative methodology in the creation of a pair of ACO collarbatives, which will help hospitals prepare for additional patients which may come as a result of healthcare reform law. The collaborative is particularly helpful if representatives from all hospitals agree on a specific focus, such as mortality rates or hospital acquired infections, for their discussion. "Everyone in the collaborative has the same goals and agrees on the same measurement approach," says Dr. Bankowitz. "Premier feels very strongly about the collaborative methodology and preparing hospitals for the ACO world."

3. Minimize variation in the patient's care plan. One way to minimize variation in the patient's care is to reduce the number of handoffs that occur during a patient's stay at the hospital, says Marc Hafer, president and CEO of Simpler Consulting. During their length of stay, a patient is seen by multiple physicians, nurses and specialists. This in turn, results in multiple handoffs increasing the likelihood of errors and delays. Hospitals that implement a collaborative approach where the physicians, nurses and pharmacists work together to develop a treatment plan, have been able to improve efficiency and patient satisfaction while reducing medical errors. "With the collaborative planning, patients are getting better and being discharged from the hospital sooner," says Mr. Hafer.

4. Create patient education materials. When a patient is discharged from the hospital, he or she should be given instructions for maintaining his or her health or receive a plan for successfully managing a chronic condition at home. Making sure the patients are able to pay for their medication and understand their rehabilitation plans can decrease readmission rates — one metric for pay-for-performance. "If we do a good job of patient and family education, there are better odds the patient will be able to stay at home," says Dr. Naas.

Additionally, when nurses discharge the patients, they should document that the education was administered, says Jane Metzger, principle of emerging practices at CSC Healthcare Group. With the help of electronic hospital systems, "the nurse can be reminded to do the measure and document it," she says. This system also ensures that nurses recognize and record individual differences in patient education, as opposed to using a template for all discharges.

5. Enlist a homecare program. The hospital nurse should make sure the patient and his or her family understands the patient's medication and treatment plan before leaving the hospital. The nurse may need to coordinate a follow-up appointment between the patient and his or her primary care physician within a few days of the patient's discharge. Homecare nurses can help the hospital reduce readmission rates by connecting with the patient after they transition from the hospital back home.  

The homecare nurse can also call and visit the patient within the first 24-48 hours after he or she returns home to confirm that everything is running smoothly. The nurse can confirm the medications were obtained and are being taken appropriately. The patient and the family can be asked to describe their understanding of the care plan. "If we can put all of those ingredients into play, the patient would have better odds of avoiding readmission," says Dr. Naas.

Read other coverage on pay-for-performance:

- Including Specialists in Pay-for-Performance Presents Challenges

- Healthcare Providers to Begin Version 5010 Standards Testing in January

- Insights From the Model for ACOs: Q&A With Harold Dash of Everett Clinic on the Medicare Physician Group Practice Demonstration Project

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