Linking quality, payments

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Long-term care players will be showing a little more interest than usual in inpatient hospital happenings this year. Hospitals have embarked on a project that will pay better-performing facilities more than laggards.

For many in the long-term care community, there is little question that the time to start paying for quality is at hand, or at least near.
"I don't think it's unreasonable to think that's the potential next step, that payment would somehow be linked to quality, in a positive sense," says Bernie Dana, a long-term management consultant fronting exploratory efforts for the American Health Care Association, Washington. "It's been linked in a negative sense with penalties and poor performance in the past."
From the consumer point of view, the progression seems entirely natural.

"In general, this is where quality initiatives in healthcare are headed," said John Rother, policy and strategy director for AARP, Washington. "First, you measure it, then you disclose it publicly, and the third issue is you use it as a basis for payment incentives. It's kind of the next step for nursing homes."

How to do it, however, is the big question in many people's minds.
Hospitals taking part in a pilot program will start getting incentive pay from federal programs this year if they follow certain procedures and file certain documents. Physicians also will receive higher reimbursement for meeting or exceeding performance standards.

"We're aggressively seeking a similar demonstration project for nursing homes," said Barbara Manard, vice president, long-term care health strategies, for the American Association of Homes and Services for the Aging, Washington. "(Pay for quality) is very much a part of the thinking by policy analysts, people in government and Congress. We pay more for a better car, so we keep thinking that has to work in terms of healthcare. The truth is, we haven't figured out how to do that yet."

Quality indicators used for the Nursing Home Quality Improvement initiative aren't the answer, she and other experts say.

"Most of us argue you can't pay on the basis of those quality indicators. You're paying somebody because they had luck (with more favorable case-mixes), and that's not right," Manard said. "What they realize in the hospital field is outcome measures are not the way to go. Process measures like 'What did you do if someone came in with a heart attack – did you give them aspirin?' are measured."

Manard believes that staffing levels should be a key.

"One of the successful ways, research shows, to relate care to quality in nursing homes is the nursing staff. Is there enough and the right kind, and are they being paid sufficiently?" Manard said. "That is the best studied indicator of quality. One way to link payment to quality is to have a payment system that promotes and preserves spending on nursing. Beyond that, we're real limited in what we know what to do."

Over her quarter century in long-term care, Manard said, numerous non-federal entities have tried to link pay to quality, and have generally failed: Illinois, Iowa, Texas – her list goes on. For about the past five years, the state of Minnesota has most aggressively sought a way to link quality and pay, but without success so far, she added.

"Some people ask why you should pay the best nursing homes more because federal rules say that every nursing home patient should get optimal care," Manard said. "That is true, but not everybody's doing optional care so we have to try something here."

Family feedback sought

Family satisfaction levels should be a key element in any pay-for-quality system, said Dana, who helps represent the AHCA at quality-matters meetings with CMS and Quality Improvement Organizations.
"Vivian Tellis-Nayak's research shows that facilities that get very high family satisfaction rates also have higher financial performance results, better employee retention, a correlation across all business factors," Dana said.

Dana said he prefers an incentive system that would take into account family satisfaction levels, and "a few critical clinical measures," which would have to be consistently maintained