Changes in racial disparities under public reporting and pay for performance

1. Changes in racial disparities under public reporting and pay for performance Rachel M. Werner

2. 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

3. 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

4. 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.

5. 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

6. 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

7. 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

8. Hospital performance measures 3 condition-specific composites: • Acute myocardial infarction Aspirin at admission Aspirin at discharge ACE-inhibitor for LV dysfunction Beta-blocker at admission Beta-blocker at discharge • Heart failure Assessment of LV function ACE-inhibitor for LV dysfunction • Pneumonia Oxygenation assessment Pneumococcal vaccination Timing of initial antibiotic therapy

9. Percent safety-net: Hospital performance in 2004

10. Adjusted changes in hospital performance

11. Low Middle High % Safety-net Low Middle High % Safety-net Low Middle High % Safety-net Changes in top-ranked hospitals

12. Low Middle High % Safety-net Low Middle High % Safety-net Low Middle High % Safety-net Changes in top-ranked hospitals

13. 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

14. % Safety-net Changes in % bonus

15. % Safety-net Changes in % bonus

16. 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

17. 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

18. 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

19. 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

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

21. 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

22. 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)

23. Changes in racial disparities after public reporting

24. 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

25. 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

26. 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