Medicaid pay-for-performance program in Massachusetts fails to improve quality during first-year

Research Activities, January 2012, No. 377

In 2008, the State of Massachusetts began a pay-for-performance initiative for hospitals under its Medicaid program (MassHealth). The goal was to improve quality care for patients with pneumonia and to prevent infections after surgery. Despite best efforts, after 1 year pay-for-performance did little to improve hospital quality for the two outcomes measured, concludes a new study. The pay-for-performance program targeted MassHealth patients enrolled in plans that directly bill the State Medicaid Program. Hospitals were able to submit data electronically to MassHealth. If quality measures were met, hospitals received incentive payments averaging $40,000 per hospital. Examples of these measures for pneumonia care included the timing and selection of antibiotics as well as smoking-cessation counseling. To prevent surgical infections, measures included the selection and preventive use of antibiotics during and 24 hours after surgery.

Researchers compared care quality data from 2004 to 2009 submitted by 62 hospitals in Massachusetts. They also looked at data from 3,676 hospitals in other States. They found no evidence that the pay-for-performance program improved the quality of care for patients with pneumonia or prevented patients from getting surgical infections. When compared to hospitals in other States, those in Massachusetts had similar initial quality for pneumonia that improved at the same rate over time, regardless of financial incentives in Massachusetts. For surgical infection prevention, the State had quality levels 12 percentage points higher in 2004 compared with other State hospitals. However, by 2009, after the pay-for-performance program had been in place for a year, these levels narrowed to being nearly equal to other States.

The researchers offer several possible explanations as to why the program didn't improve quality. These included financial incentives being too small and hospitals being overwhelmed with other reporting requirements. The study was supported in part by the Agency for Healthcare Research and Quality (HS18546).

See "The effect of the MassHealth hospital pay-for-performance program on quality," by Andrew M. Ryan, M.A., Ph.D. and Jan Blustein, M.D., Ph.D., in the June 2011 HSR: Health Services Research 46(3), pp. 712-728.

Page last reviewed January 2012
Internet Citation: Medicaid pay-for-performance program in Massachusetts fails to improve quality during first-year: Research Activities, January 2012, No. 377. January 2012. Agency for Healthcare Research and Quality, Rockville, MD.