Performance Incentive Programs are Changing Hospital Purchasing Patterns

Since October 1, 2008, hospitals cannot bill Medicare for costs related to hospital-acquired vascular catheter-associated infections.¹ This is a significant financial incentive for hospitals to reduce hospital-acquired infections as the cost of treating each infection averages more than $36,000.²

Effective FY 2015, Medicare also will penalize hospitals within the lowest quartile based on the rate of infections and other hospital-acquired conditions (HACs).³ According to CMS, these hospitals will “be paid 99 percent of what they would otherwise be paid under the IPPS” (Inpatient Prospective Payment System).⁴

Hospital-based infection control committees are responsible for developing strategies to reduce hospital-acquired infections. A 2013 MedSpan study with 23 ICU/CCU nurses shows that there is no standard composition of infection control committees. Most commonly, these committees include infection control practitioners, nursing administration, ICU/CCU nurses, and quality assurance. However, sometimes the committee also includes representation from risk management, microbiology, epidemiologists, central sterilization, or environmental services.

Hospitals can reduce central-line infections by using more effective disinfection products and improving compliance with established guidelines.

MedSpan’s survey indicates that many hospitals have moved beyond relying solely on alcohol swabs to disinfect central lines.  Many hospitals use disinfection caps, such as the Curos Strip, SiteScrub, SwabCap (pictured below), and DualCap.

ICU/CCU nurses who use disinfection caps most value the cap’s duration of disinfection and the effectiveness of its disinfection properties. Also important is the extent to which the cap saves nursing time, as this drives compliance with disinfection guidelines.

Almost all of the surveyed ICU/CCU nurses believe their hospital’s use of disinfection caps will either spread to additional hospital units or stay the same over the next three years. Almost no nurses expect the use of disinfection caps to decline.

As our study illustrates, pay-for-performance incentive programs (or penalties, as in this case) can affect clinical practice and hospitals’ purchasing patterns.  In addition to the above hospital-based example, dialysis clinics experienced similar changes in purchasing patterns due to the ESRD Quality Improvement Program (QIP) and ESRD Prospective Payment System (PPS).  For hospitals, more changes in purchasing patterns are likely to occur as pay-for-performance programs proliferate and the magnitude of the incentive increases. Therefore, manufacturers of healthcare products should monitor these trends and develop data that demonstrate how their products help optimize performance under these incentive programs.

For further details on this study, please contact:
Mike Epstein
Director of Research Services
MEpstein@medspanresearch.com
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¹http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/downloads/hacfactsheet.pdf
²http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/a-revenue-leak-soon-turns-to-flood-how-payment-penalties-for-high-infection-rates-could-drain-hospital-finances.html
³http://www.morganlewis.com/pubs/Ruskin_HospitalStrategies_March2012.pdf
⁴http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-Sheets/2013-Fact-Sheets-Items/2013-04-262.html

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