Changes in racial disparities under public reporting and pay

for performance

Rachel M. Werner

Can market-based QI decrease disparities?

• Disparities stem in part from location of care– Opportunity to reduce disparities by improving

performance among low-quality providers– Public reporting and P4P may reduce

disparities

Market-based QI may increase disparities

• Consumer-driven increases– Limited access to information– Limited access to high-quality providers

• Provider-driven increases– Limited resources to improve quality– Selection of low-risk patients

How does P4P affect resource-poor hospitals?

Werner RM, Goldman LE, Dudley RA. Comparison of change in quality of care between safety-net and non-safety-net hospitals. JAMA 2008;299:2180-2187.

Financial resources are important for QI

• Resource-poor hospitals (i.e. safety-net hospitals) may not be able to invest in quality improvement

• Low-performance at baseline reduces economic rewards

• Rich become richer while poor become poorer

Objective

• To examine changes in disparities in quality of care between safety-net and non-safety-net hospitals under public reporting

• To estimate the financial impact of P4P at safety-net hospitals

Empirical approach

• Publicly available data on hospital performance– www.hospitalcompare.hhs.gov

• All acute care non-federal hospitals in U.S.– 3,665 hospitals– 2004 to 2006

• Compare changes in performance across % safety-net care at hospitals– % Medicaid

Hospital performance measures

3 condition-specific composites:–Acute myocardial infarction

Aspirin at admissionAspirin at dischargeACE-inhibitor for LV dysfunctionBeta-blocker at admissionBeta-blocker at discharge

–Heart failureAssessment of LV functionACE-inhibitor for LV dysfunction

–PneumoniaOxygenation assessmentPneumococcal vaccinationTiming of initial antibiotic therapy

Hospital performance in 2004Percent safety-net:

Adjusted changes in hospital performance

Change in performance (2004 to 2006)

Non-safety-net Safety-net

Difference

Acute myocardial infarction 3.8 2.3 1.5 *

Heart failure 8.0 6.6 1.4 *

Pneumonia 9.3 8.0 1.3 ***

*.05>p-value≥.01; ***p-value<.001

Adjusted for: hospital characteristics, baseline performance, states fixed-effects

Changes in top-ranked hospitals

Low Middle High

% Safety-net

Low Middle High

% Safety-net

Low Middle High

% Safety-net

Changes in top-ranked hospitals

Low Middle High

% Safety-net

Low Middle High

% Safety-net

Low Middle High

% Safety-net

Pay-for-performance simulation

• CMS hospital P4P demonstration project

• In 2004, hospital receive bonuses based on relative performance

• In 2006, hospitals face penalties for not achieving performance above threshold

Changes in % bonus

% Safety-net

Changes in % bonus

% Safety-net

Summary

• Safety-net hospitals had smaller improvements in performance between 2004 and 2006

• Safety-net hospitals were less likely to be identified as top-performers by 2006

• Under P4P, safety-net hospitals would have substantially smaller payments by 2006

Implications

• Hospitals serving a disproportionate share of minority and low income patients are in worse financial condition at baseline

• In setting of public reporting or P4P, widening performance gap could further worsen finances

• Declining finances may further worsen clinical quality

Does “cream-skimming” increase disparities?

Werner RM, Asch DA, Polsky D. Racial profiling: the unintended consequences of coronary artery bypass graft report cards. Circulation. 2005;111:1257-1263

Physician response to public reporting

• In 1991, New York State began publicly rating cardiac surgeons based on their mortality rates

• Composition and risk profiles of patients undergoing CABG has changed– Harder for high-risk patients to find a surgeon

– Schneider and Epstein 1996

– The number and severity of patients transferred out of NY increased

– Omoigui et al 1996

– Lower illness severity of patients receiving CABG in report cards states compared to other states

– Dranove et al 2003

Statistical discrimination

• Because of clinical uncertainty physicians use beliefs about a group to make decisions about an individual

Statistical discrimination in the setting of public reporting

• Physicians may avoid patients with high unmeasured severity

• If surgeons believe racial and ethnic minorities will have worse outcomes, surgeons will preferentially treat white patients after report cards are released

Empirical approach

• All patients admitted with AMI in New York– n = 310,412

• Compared to a national sample of patients admitted with AMI– n = 618,139

• Differences in CABG use between white vs. black and white vs. Hispanic over 2 time periods:– Before report cards (1988-1991)– After report cards (1992-1997)

Changes in racial disparities after public reporting

Summary

• There was a relative increase in disparities in CABG use after public reporting

• No relative change in complements (cardiac catheterization) or substitutes (angioplasty)

• Relative change in CABG use for both blacks and Hispanics

Implications

• Racial/ethnic minorities have lower rates of CABG use before public reporting

• Public reporting may cause increased pressure for physicians to perform well

• If race is a signal for severity, racial disparities may increase– Quality may worsen for subgroups of patients

even as overall quality increases

Reducing racial disparities with market-based incentives

• Changes in financial incentives– Reward improvements in care in addition to

relative rank– Provide direct subsidies for quality

improvement

• Changes in measures– Directly reward reduced disparities– Stratified performance measures