Could Medicare Quality Payment Plans Create Inequality?

Janice Simmons, for HealthLeaders Media , July 1, 2010

To test this assumption, Blustein’s team looked at the link between local economic and human resources and hospital performance for two common heart conditions—acute myocardial infarction and heart failure—for 2,705 hospitals between 2004 and 2007. They calculated hospitals’ scores using the same methodology proposed for Medicare’s new pay for performance reimbursement plan.

They also examined regional variation for five factors: poverty, unemployment, provider shortage, non high school graduates in the work force, and college graduates in the work force.

They found that although overall performance scores for heart attack and heart failure improved during the study, quality at hospitals in disadvantaged regions still continued to “lag significantly behind” more advantaged hospitals.

Hospitals in those counties, for instance, with widespread poverty throughout the population had lower average performance scores for treating heart failure and heart attack than those in affluent counties. Hospitals in areas that had a lower percentage of college graduates in the workforce also had lower average performance scores.

Noting that nearly 33% of the hospitals studied were in disadvantaged counties, the researchers said that a pay for performance model may “exacerbate inequalities” across regions by rewarding hospitals located in regions that are rich in economic and human resources—and punishing facilities that are in disadvantaged locations.

They determined that in the long run, even though these facilities in underserved areas could demonstrate improvements over the four yeas, they still would end up receiving reduced reimbursement under a pay for performance system for failing to reach the levels of more affluent hospitals.

Although the Centers for Medicare and Medicaid Services said that it will be scrutinizing the distribution of funds to determine whether hospitals are being disadvantaged, the study’s authors stress that the agency must take a more “proactive approach” now to consider changes.

As an alternative, Blustein and her colleagues suggest, that hospitals receive credit for their levels of improvement achieved—regardless of their starting point. That could help hospitals in economically disadvantaged areas, where many of the hospitals starting at a lower-performing baseline exist.

Also, changing the model so that improvement is assessed over a longer time frame “could help make the program more equitable” as well, they said.

“Holding providers accountable is not an unreasonable approach to quality improvement,” the researchers conclude, but it should be done “in a way that attends to the profound inequalities in local circumstances that shape life in the 21st century.”

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at

Comments are moderated. Please be patient.




FREE e-Newsletters Join the Council Subscribe to HL magazine


100 Winners Circle Suite 300
Brentwood, TN 37027


About | Advertise | Terms of Use | Privacy Policy | Reprints/Permissions | Contact
© HealthLeaders Media 2016 a division of BLR All rights reserved.