Pay-for-performance models of reimbursements are not new, but Hawaii is using them successfully to make real health reform progress.
Recently, Hawaii Pacific Health announced that it had finalized a new three-year agreement with the Hawaii Medical Service Association (HMSA) that covers services provided by four major hospitals.
In 2010 Congress passed health care reform with the Afforable care Act, and the federal government recently formalized its national health care strategy.
But pay for performance in the group health market and other payment reform strategies and effieicny incentives were left on the cutting room floor.The new agreements create a "pay-for-performance" model that provides a certain percentage of payments based on whether the four Hawaii hospitals achieve or exceed agreed upon quality metrics. Hawaii Pacific Health says its always been focused on clinical quality and service excellence, having worked with the Institute for Healthcare Improvement for many years.
Since 2004, Hawaii Pacific Health has invested significant resources in pursuing the highest standards of quality care. That work has resulted in improvements in key areas such as hospital acquired infections. These conditions cost about $30,000 to $40,000 per patient to treat, so the cost savings is significant for all parties when our hospitals achieve and maintain a zero infection rate. More important, though, is that our patients can feel confident that they are receiving the best care possible in our facilities.
In 2010, these emergency departments were recognized for being among the best in the country, with hospital scores routinely in the top 10-15 percent. When patients express high levels of satisfaction with the care they receive, they are more likely to follow the recommendations for their care and achieve better outcomes as a result.
Hawaii has a distinct advantage because it has achieved for its hospitals and physicians an integrated electronic medical record system called Epic. Patients can view their records online, make appointments, and query their doctors electronically.
In August 2010, Hawaii Pacific Health focused attention on patients at Straub and Kauai Medical Clinic with known high blood pressure -- higher than the recommended goal of 140/90. Today, 70 percent of our Straub patients and 72 percent of our Kauai patients have reached this goal, which is significantly better than the nation's average. This means that approximately 300 more patients in Hawaii are now at lower risk of heart attack or stroke as a result of our work to improve care of high blood pressure.
How Hawaii Made it Happen
Even without health care reform, the need for payment reform would have been something we would have engaged in anyway," Fred Fortin, Senior Vice President at Hawaii Medical Service Association says. "We've been working on this (for three years)."
It was a key element in negotiations between HMSA and Hawaii Pacific Health over contracts for its hospital network, comprising Kapiolani, Pali Momi, Straub and Wilcox. After some high-profile acrimony, the talks produced an agreement "to create a payment system that ties financial incentives to improved quality and delivery of care and positive patient outcomes," according to the formal statement.
That's one example of health care providers in Hawaii ramping up early for reform provisions that are set to go into effect down the road. By 2012, the national Department of Health and Human Services will set quality standards, allowing providers who treat Medicare patients to receive incentive payments if they meet standards for quality of care -- fewer patients readmitted to the hospital for the same illness, better outcomes overall.
Analysis
Payment reform to improve medical provider collaboration and improve efficiency has side effects. It improves quality health outcomes. I could site dozens of health clinics that have proven such from Group Health Cooperative in washingotn and Wisconsin, Cleveland Clinic in Ohio, Mayo Clinic in Minnesota, and ThedaCare in Wisconsin. The evidence is overwhelming. This is why increased efficiency through accountable care organizations and medical homes are two items I have long touted as essential reforms that should have been the basis for national health care reform. The Affordable Care Act passed in 2010 did little to create incentives for increased quality care. Perhaps others will see what Hwawaii has achieved and be a copy-cat.
