First: The Good News for Physicians!

Literally in the eleventh (if not twelfth) hour at around 4 a.m. on Saturday, December 9, in its final gasp, the 109^th Congress voted to forego the previously HHS ordered 5.1 percent decrease in Medicare reimbursement for physicians in 2007.  Instead, reimbursement will be frozen this year.  That may not be cause to pop the champagne corks, but as W. C. Fields would respond to a question about his life:  “Not bad, considering the alternative.”

A Hidden Bonus: Pay for Performance?

Tucked into the legislation freezing 2007 Medicare physician reimbursement rates was a provision that beginning in July, 2007, those who submitted quality information in 16 (as yet to be finally determined) areas on some (also as yet to be determined percentage of their Medicare patients) would qualify for a 1.5% “bonus” in their Medicare reimbursement. At least initially, all that physicians will need to do is to submit the quality information. Their 1.5% bonus will not be conditioned on their quality results. Also, those physicians not submitting the required quality information will not be penalized. They just won’t get the 1.5% bonus.

This represents yet another move by the federal government into what has now come to be known as the “Pay for Performance” arena.  There are over 100 such initiatives in various states of evolution in the private sector.  Also, last August, President Bush signed an Executive Order requiring all those delivering health care services to federal beneficiaries in the Medicare and Medicaid programs, the Veterans and Military Health Systems and civilian federal employees (covered by the Office of Personnel Management) to make the quality and cost (price) of their services known.  This is all part of the Bush Administration’s Transparency Initiative intended to provide this type of information to patients, their families and others in the federal sector involved in both the receipt and purchasing of health care services.  HHS Secretary Michael Leavitt is pushing hard for Pay for Performance (also known as Health Care Value Purchasing) to become a significant force in the purchasing and delivery of care to government subsidized beneficiaries before the end of his tenure in 2009.

Is All This Going to be Worth It? Recent Research and Other Initiatives

For now, the reward for submitting the required quality information is not that great—only a 1.5% increase in reimbursement.  For physicians who would either have to expend a significant amount of their or their staffs’ time to collect and report this information and/or to install electronic systems capable of doing this, the return on investment (strictly from a financial perspective at least) may not justify it.   Based on the relatively limited number of studies completed on the impact of Pay for Performance, the consensus is that  incentives approaching 10% of base reimbursement will probably be required for most physicians to make the necessary investments not only to report on quality, but, more importantly, to improve results sufficiently to qualify for that extra money.   

In addition, most researchers would have to admit that the proverbial jury is still out on whether improved adherence to best medical, safety and preventive practices results in significant improvements in the outcomes of medical care.   A recent study by researchers at the University of Pennsylvania published in the December 13 edition of the “Journal of the American Medical Association” (JAMA) demonstrated that there was not that significant a difference in the mortality rates of patients whose physicians were in the 75^th vs. 25^th percentile in adhering to 10 of the so-called Hospital Quality Measure Set standards of care promulgated by the federal government for the treatment of myocardial infarction, congestive heart failure and pneumonia.   (Werner, Bradlow, Relationship between Medicare’s Hospital Compare Performance Measures and Mortality; JAMA; 2006: 296:2694-2702). 

However, the Penn researchers were comparing mortality, as opposed to a potential myriad of other outcome indicators.  The same day that this study was reported, the Institute for Healthcare Improvement (IHI) announced its upgrade of its previously successful 100,000 Lives Campaign to prevent unnecessary deaths through six safety interventions.  IHI’s new 5 Million Lives Campaign aims to eliminate not just deaths, but any kind of injury, due to preventable medical errors through the implementation of both the original six, plus six additional safety and quality improvement interventions (IHI Launches National Campaign to Reduce Medical Harm in U.S. Hospitals, Building on its Landmark 100,000 Lives Campaign; Institute for Healthcare Improvement Press Release; Orlando, Fl; December 12, 2006).    

It could well be the case that the real pay off from improving adherence to best evidence based medical, safety and preventive practices is in eliminating or minimizing any kind of patient injury, not just deaths.  Since the vast majority of litigation derives from allegedly preventable errors resulting in medical harm, short of death, the extent to which safety and quality improvement interventions may minimize these should produce medical legal risk management benefits.   Also, the measurement of performance for value based purchasing rewards is much more likely to be based on producing superior value clinical outcomes (as opposed to avoiding deaths).  

The Value of Patient Safety and Quality Improvement Initiatives for Physicians and their Patients

In announcing the 5 Million Lives Campaign at IHI’s Annual Meeting in Orlando on December 12, Dr. Donald Berwick, President and CEO of the Institute for Healthcare Improvement (IHI), defined medical harm as “….the unintended physical injury resulting from or contributed to by medical care (including the absence of indicated medical treatment) that requires additional monitoring, treatment or hospitalization, or results in death…”  IHI provides a more detailed description of this medical harm at its website:  http://www.ihi.org 

It is important here to recognize the much more sweeping approach that IHI is taking here in its newest campaign--this one lasting two years.  As dramatic as the success of its first campaign was resulting in the saving of an estimated 122,300 lives at 3,100 participating hospitals based on their implementing between three and six of the original set of safety and quality improvement interventions, this new campaign goes much further.  By seeking the involvement of 4,000 hospitals and their staff physicians to implement up to 12 safety and quality improvement interventions,  this time, the goal is to eliminate around one-third (5 million) of the estimated 15 million instances of medical harm which occur to patients annually as a result of preventable medical errors and suboptimal practice.    

The most obvious benefit of implementing the 12 interventions (explained in their entirety at http://www.ihi.org) is to avoid the preventable harm (as Dr. Berwick defined this, above) to millions of patients. As Dr Berwick said, “We can and we will, equip all willing health care providers with the tools they need to make the motto ‘First, do no harm’ a reality.”

For the physicians of these millions of patients whose medical harm may be averted, however, the value is equally great, viz. to improve physician patient relations and minimize the risk of litigation that might otherwise follow from suboptimal care.   This constitutes a potentially huge benefit to physicians.  Fear of potential medical liability is one of the most important reasons for the significant drop in physician morale across the country (The American College of Physician Executives Poll on Physician Morale; Physician Executive; December, 2006).  Although never being able to eliminate the possibility of litigation altogether, being involved in these twelve improvement interventions should both protect physicians from being sued and from weak defenses in the event of litigation.   The concluding section of this article will discuss how physicians may join with themselves, their hospitals and liability carriers in this and other safety and quality improvement initiatives to acquire these protections.

Physicians, Hospitals and their Liability Carriers: Their Mutual Stakes

Plaintiffs’ attorneys can testify that their favorite cases are those where defendant hospitals and physicians are not united in their defense.  That makes it really easy for judges and juries to find liability against one or the other (and usually both) defendants.  Not being on the same page can prove very costly in so many ways for defendant hospitals, their staff physicians and liability carriers.

The success of any quality and safety improvement initiative depends on the alignment of interests and ongoing cooperation of participating hospitals and their staff physicians.  Since physicians still control approximately 75% of the more than $2 trillion spent on health care annually in this country, that fact goes without saying.

The precarious intra-organizational relationship of hospitals with their autonomous medical staffs, lends itself to conflict.   However, the area of improving the safety and quality of care is one in which all hospitals and their staff physicians can (indeed must) be aligned.  It strikes at the very heart of their individual and mutual reasons for being.  Achieving ongoing collaboration and success in pursuing the noble goals of the 5 Million Lives Campaign (and those of other safety and quality improvement initiatives such as Princeton Insurance’s discussed in the December, 15, 2006 Risk Review Online) can and should result in significantly improved hospital physician relations. This should also produce a much more aligned mutual defense posture in the event that litigation involving both parties still occurs.

The Way Forward