Medicare incentives don't lower hospital mortality rates

May 25, 2012

Medicare's idea that paying hospitals based on how they perform does not lead to fewer deaths, according to a new study, refuting a commonly held belief in the reimbursement industry.

Medicare's idea that paying hospitals based on how they perform does not lead to fewer deaths, according to a new study. The findings appear to refute the premise that basing Medicare hospital payments on performance and patient satisfaction will save money and improve care.

The study in the New England Journal of Medicine examined death rates at 252 hospitals that participated in a Medicare pilot program from 2003 to 2009. The institutions were measured on 36 performance metrics, including mortality rates for heart attack, with the best-performing hospitals earning bonuses. The study found that the mortality rate at the participating hospitals was identical to the rate at nonparticipating hospitals.

In a statement, the Centers for Medicare and Medicaid Services said the pilot program was separate from the value-based purchasing model Medicare will be adopting beginning this fall.