31 March 2016: Igna Bonfrer

Obama Care: The Effects of the Step-Wise Introduction of Pay-for-Performance

Speaker(s): Igna Bonfrer

Date: Thursday, 31 March, 2016

Time: 12.00-13.00

Venue: J7-55

Contact person(s): Teresa Bago d'Uva  



Financial incentives to improve the performance of hospitals have been rapidly expanding over the last decade, especially in the US with the implementation of Obama Care and through the preceding voluntary Hospital Quality Incentive Demonstration (HQID).  The hospitals that self-selected into the HQID - the early adopters - have now been under financial incentives to improve quality for more than a decade and are likely to have a comparative advantage.  This study aims to evaluate the effects of pay-for-performance in the US on 1) standardized 30 day mortality, 2) clinical process measures and 3) patient experience among both early and late adopters. We use claims data from all program beneficiaries admitted for any of ten main conditions between 2003 and 2013 (n = 15,750,000) and use data on hospital characteristics from all US acute care hospitals (n = 2,933). We match the early adopters to comparable late adopters based on hospital characteristics and the baseline level of the outcome measure of interest. Linear regressions are then estimated on the matched dataset to determine differences in trends over time between early and late adopters in the three outcomes. We find that while early adopters started from higher levels of outcomes, their improvements over time are smaller than among the late adopters. Early adopting hospitals are more likely to receive financial bonuses under the current Obama Care policy but this has not (yet) resulted in significant differences in mortality. As experience with pay-for-performance continues, these findings suggest that we should expect at best modest improvements in hospital quality, even over the long run.