Hospitals could have saved $1 billion with pay-for-performance measures, study says

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Pay-for-performance measures could have saved Medicare hospital costs $1 billion, a new study finds.

Investigators examined data from a three-year demonstration project, which included 260 hospitals in 38 states. The study examined quality of care measures for pneumonia and for heart bypass surgery. Recommended care measures would have resulted in 3,000 fewer deaths and 6,000 fewer medical complications, they found.

Hospital costs for patients receiving the highest level of recommended care for pneumonia were about $8,000, compared with costs of about $10,000 for those that received the lowest number of care measures. The cost difference between the highest and lowest number of care measures was more than $10,000 for heart bypass patients. Projects are also underway to examine the value of pay-for-performance in nursing homes.