Patient Lives Saved as Performance Continues to Improve in Groundbreaking CMS/Premier Pay-for-Performance Project.

Improved Quality Means More Patients Receiving Recommended Treatments

Centers for Medicare & Medicaid Services Awards $8.7 Million in Incentive Payments to Top Hospitals; Results Support Theory That Incentives Can Drive Improvements in Quality

CHARLOTTE, N.C. -- Patients treated at hospitals participating in a groundbreaking pay-for-performance project managed by the Premier Inc. healthcare alliance are living longer and receiving recommended treatments more frequently, according to second-year results announced today by the Centers for Medicare & Medicaid Services (CMS).

According to the results released today, more than 260 hospitals participating in the CMS/Premier Hospital Quality Incentive Demonstration (HQID) project have raised overall quality by 11.8 percent in two years, based on their delivery of 30 nationally standardized and widely accepted care measures to patients in five clinical areas. (Click here for patient example.) http://www.premierinc.com/quality-safety/tools-services/p4p/hqi/ patients-story.jsp

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Variation between top and bottom performers continues to shrink as clinical quality improves at participating hospitals.

"The Premier hospital alliance is showing that even limited additional payments, focused on supporting evidence-based quality measures, can drive across-the-board improvements in quality, fewer complications and reduced costs," said CMS Acting Administrator Leslie V. Norwalk.

Improvements in quality of care saved 1,284 acute myocardial infarction (heart attack) patients, according to an analysis of mortality rates at hospitals participating in the HQID project. In addition, patients received approximately 150,000 additional recommended evidence-based clinical quality measures, such as smoking cessation, discharge instructions and pneumococcal vaccination. CMS announced today that it will award incentive payments of $8.7 million to 115 top-performing hospitals, representing the top 20 percent of hospitals in each of the project's five clinical areas.

"The main point is that the majority of hospitals in the HQID project, even those on the lower end of the scale, improved their quality of care across the board with respect to reliable use of scientifically based practices," said Donald M. Berwick, MD, MPP, FRCP, president and CEO at the Institute for Healthcare Improvement (IHI). "Hospitals want to offer high quality care; sometimes they just need to be pointed in the right direction. The HQID project has offered hospitals a guideline to improve their patient care."

"This study was conducted with a very strong clinical, quality and cost database from Premier. Such a database helps you to study your own care and identify opportunities for improvement." Berwick said.

When compared to the rest of the nation's hospitals, the quality score of hospitals in the P4P project on 18 publicly reported quality indicators is significantly higher, 85 percent to 79 percent, confirming that performance incentives are effective at improving quality of care.

Congress has mandated that Medicare develop a plan to implement "value-based purchasing," which ties payment to quality of care and other outcomes, beginning with FY2009. The HQID is a test of one value-based purchasing model.

"For over a decade, Premier has been committed to working with hospitals to improve clinical quality and patient outcomes while safely reducing costs," said Richard Norling, president and chief executive officer of Premier Inc. "The findings from the first two years of the HQID project clearly show that the project is having a positive impact on the quality of care in our nation's hospitals and on the lives of patients and their families."

Launched in October 2003 by the Premier Inc. healthcare alliance and CMS, the pay-for-performance project involves more than 260 hospitals across the nation, which submit data to Premier for validation and analysis. In turn, Premier submits the data to CMS.

The first national project of its kind, HQID is designed to determine if economic incentives to hospitals are effective at improving the quality of inpatient care. Participating hospitals report process and outcome measures in five clinical areas - acute myocardial infarction (AMI/heart attack), congestive heart failure (CHF), coronary artery bypass graft (CABG), pneumonia, and hip and knee replacement.

The pay-for-performance model used in the project includes financial incentives for the top 20 percent of hospitals in each of the five clinical areas. The top 10 percent of hospitals receive a 2 percent incentive payment for patients in that clinical area. Hospitals in the second decile receive a 1 percent incentive payment. Hospitals in the top 50 percent of each clinical area receive public recognition on the CMS Web site.

Hackensack University Medical Center (HUMC) in Hackensack, NJ, was a top performer in all five areas for the second year in a row, providing high quality care for 2,853 Medicare patients. Their total award across the five clinical areas will be approximately $744,000.

"HUMC's primary focus has always been and continues to be on improving the health of the people we serve," said John P. Ferguson, president and chief executive officer of HUMC. "Long before public reporting and pay for performance came in to existence in healthcare, HUMC made a promise to be a leader in the quality arena - constantly measuring our outcomes and finding new approaches to achieve higher levels of quality patient care. It is especially gratifying for our team to know that our work impacts the way healthcare is delivered across the country - making good on our original promise."

Charleston Area Medical Center in Charleston, WV, received the second highest incentive award, $701,000, for achieving top performance in four clinical areas. Charleston Area Medical Center also received the highest single award, $432,901, in one clinical area for providing high quality care to 883 Medicare patients who had CABG procedures.

"The quality project is about reliably delivering the best evidenced-based care to every patient every day," said Glenn Crotty, Jr., MD, chief operating officer, Charleston Area Medical Center. "The recognition and reward is nice, but the main issue is reliable care to reduce risk of death and reduce readmissions to hospitals so every patient's health status is better."

The second largest single award totals $250,775 and will be provided to the Bone and Joint Hospital in Oklahoma City, OK, a member of SSM Health Care, for exceptionally high quality of care for patients receiving hip and knee replacement procedures.

"We're extremely proud of our employees and medical staff for achieving this benchmark level of performance for the second consecutive year," said Janet Farhood, executive vice president and COO at Bone & Joint Hospital. "We were already performing at high levels in areas such as surgical infection prevention in joint replacement, but participating in the project drove performance even higher. It proves that real-time monitoring of key processes, coupled with continuous quality improvement and the desire to achieve high quality performance, truly benefits our patients."

The average composite quality scores (CQS), a combination of clinical quality measures and outcome measures, improved significantly between the inception of the program and Year II in all five clinical focus areas:

* From 87.5 percent to 94.4 percent for patients with AMI (heart attack).

* From 84.8 percent to 93.8 percent for patients with coronary artery bypass graft.

* From 64.5 percent to 82.4 percent for patients with heart failure.

* From 69.3 percent to 85.8 percent for patients with pneumonia.

* From 84.6 percent to 93.4 percent for patients with hip and knee replacement.

In addition, the range of variance among participating hospitals also is closing, as those hospitals in the lower deciles continue to improve their quality scores and close the gap between themselves and the demonstration's top performers.

"Quality is a core value and a leadership priority in the demonstration's top performing hospitals," said Stephanie Alexander, senior vice president and general manager of Premier Healthcare Informatics. "These hospitals' outstanding clinical performance begins with executive support, a strong culture of quality, and the dedication of the appropriate resources. We're honored to have the opportunity to work with these outstanding organizations as a part of this groundbreaking project."

For complete information about the HQID project and to view those hospitals ranking in the top 50 percent in each focus area, visit www.premierinc.com/qualitydemo.

About Premier Inc., recipient of the 2006 Malcolm Baldrige National Quality Award 

Serving 1,700 hospitals and 42,000 other healthcare sites, Premier Inc. is the largest healthcare alliance in the United States dedicated to improving patient outcomes while safely reducing the cost of care. Owned by not-for-profit hospitals, Premier operates the nation's largest healthcare purchasing network, the most comprehensive repository of hospital clinical and financial information and one of the largest policy-holder owned, hospital professional liability risk-retention groups in healthcare. Headquartered in San Diego, Premier has offices in Charlotte, N.C. and Washington, D.C. For more information, visit www.premierinc.com.