To evaluate the effects of edicare's hospital pay‐for‐performance demonstration project on hospital revenues, costs, and margins and on edicare costs.
Data Sources/Study Setting
All health care utilization for edicare beneficiaries hospitalized for acute myocardial infarction (;‐9‐ code 410.x1) in fiscal years 2002–2005 from edicare claims, containing 420,211 admissions with .
We test for changes in hospital costs and revenues and edicare payments among 260 hospitals participating in the edicare hospital pay‐for‐performance demonstration project and a group of 780 propensity‐score‐matched comparison hospitals. Effects were estimated using a difference‐in‐difference model with hospital fixed effects, testing for changes in costs among pay‐for‐performance hospitals above and beyond changes in comparison hospitals.
We found no significant effect of pay‐for‐performance on hospital financials (revenues, costs, and margins) or edicare payments (index hospitalization and 1 year after admission) for patients.
Pay‐for‐performance in the hospital demonstration project had minimal impact on hospital financials and edicare payments to providers. As P4P extends to all hospitals under the ffordable are ct, these results provide some estimates of the impact of P4P and emphasize our need for a better understanding of the financial implications of P4P on providers and payers if we want to create sustainable and effective programs to improve health care value.
