Wider Use of Quality Measures from Pay-for-Performance Project Could Save Thousands of Lives, Reduce Hospital Costs.

CHARLOTTE, N.C. -- Wider adoption of quality measures used in a groundbreaking Medicare pay-for-performance demonstration project could save thousands of lives and reduce hospitals costs, according to an analysis released today by the Premier Inc. healthcare alliance.

According to Premier's analysis, if all pneumonia, heart bypass, heart attack (acute myocardial infarction), and hip and knee replacement patients nationally received most or all (76 to 100 percent) of a set of widely accepted care processes in 2004, it could have resulted in nearly 5,700 fewer deaths; 8,100 fewer complications; 10,000 fewer readmissions; and 750,000 fewer days in the hospital. In addition, hospital costs could have been as much as $1.35 billion lower.

"This analysis is extremely valuable because it provides empirical evidence supporting the concept of the business case for quality," said Dr. Peter K. Lindenauer M.D. M.Sc., Medical Director, Clinical and Quality Informatics for Baystate Health in Springfield, Mass. "Not only is it possible for hospitals to provide high quality care efficiently, but in fact those institutions that achieve outstanding quality performance appear to benefit from reduced costs and improved outcomes."

The analysis is based on data from Premier's Hospital Quality Incentive Demonstration (HQID) pay-for-performance demonstration project with the Centers for Medicare and Medicaid Services (CMS). Through that project, Premier collects a set of 33 quality indicators from more than 250 hospitals across the country. Using clinical quality measure data that has been audited and validated by CMS, Premier undertook additional analysis using the detailed cost and clinical data available in Premier's Perspective(TM) database, the most comprehensive clinical, financial and operational comparative database in the nation.

"Our nation's current healthcare payment system pays all hospitals the same way regardless of the quality of care delivered," said U.S. Representative Sue Myrick. "These new findings point the way toward a payment system that rewards hospitals for delivering higher quality care. A common sense, outcomes-based system will hopefully be a better one for both patients and hospitals."

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 CMS/Premier Hospital Quality Incentive Demonstration Project (HQID) is a test of one value-based purchasing model.

The analysis grouped patients by the number of care processes they received and then examined costs and outcomes across each group. Because the data on care processes are not available from all hospitals, Premier researchers extrapolated the national implications based on discharge data from the Agency for Healthcare Research and Quality (AHRQ) Healthcare Cost and Utilization Project (HCUP).

"Our goal with this project is to improve patient outcomes by encouraging the reliable delivery of basic care processes which result in lower mortality, fewer readmissions, fewer complications and shorter lengths of stay," said Richard A. Norling, president and CEO of Premier. "Through our work with hundreds of hospitals across the nation, we have found that they are able to implement these care processes without a great deal of expense, new technology or staff time. This truly is win-win healthcare."

The 33 evidence-based clinical quality measures were developed by government and private organizations (for more information on the indicators, go to: www.qualitydemo.com). For instance, the measures for pneumonia are as follows:

1. Oxygenation assessment

2. Pneumococcal vaccination

3. Blood culture before first antibiotic

4. Adult smoking cessation counseling

5. Initial antibiotic selection

6. Initial antibiotic within four hours of hospital arrival

7. Flu vaccination

"As the first real-world test of these quality measures, this project represents an important step forward in our understanding of the impact of process improvement on patient outcomes," said Maureen Bisognano, executive vice president and chief operating officer of the Institute for Healthcare Improvement (IHI). "This study clearly identifies the positive results for patients when providers reliably implement a set of evidence-based care practices."

While the study findings from patients receiving care for pneumonia, heart bypass, heart attack and hip and knee replacement procedures are extremely positive, the findings from heart failure patients demonstrate a need for continued evaluation into the relationship between improved process delivery and outcomes. Heart failure patients who received all the care processes had longer hospital stays and more complications but fewer readmissions. Premier also found that during the study time period, heart failure patients were more likely to have extensive diagnostic procedures and surgical interventions, both of which would increase costs of care and increase risk for the complications studied but may reflect the most appropriate care for the patient.

"It is important for hospital leadership to understand the study findings because the care processes tracked by the project are largely managed and delivered by hospital staff," said Douglas Hawthorne, chairman of the Premier board of directors and president and CEO of Texas Health Resources, which has 13 hospitals participating in the demonstration project.

"Premier's study identifies actions hospital staff can take today to improve outcomes," Hawthorne said. "The study indicates that patients could benefit tremendously when hospitals deliver all of these care processes every time."

For more information, including a complete list of all the quality measures tracked in the project, visit www.premierinc.com/p4p/press.

About Premier Inc.

A healthcare alliance entirely owned by more than 200 of the nation's leading not-for-profit hospitals and healthcare systems, Premier Inc. helps hospitals accelerate both clinical and financial performance. Premier's shareholders operate or are affiliated with 1,500 hospitals and more than 41,000 other healthcare sites. Premier's members and clients benefit from group purchasing and supply chain services, clinical and operational performance measurement, benchmarking and insurance programs. Headquartered in San Diego, Calif., Premier has offices in Charlotte, N.C., and Washington, D.C. For more information, visit www.premierinc.com.