If You Don’t Take Your Meds, Should Your MD Be Punished?
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The Fiscal Times
April 28, 2014

Federal policies intended to improve the quality of health care may unfairly penalize hospitals that serve low-income people—shifting money away from doctors at these facilities and further widening the disparity between the rich and poor.

That is the concern of a panel of 26 experts commissioned by the Obama administration that is calling for a sweeping overhaul to federal pay-for-performance initiatives. Medicare and a growing number of private insurance companies are paying providers based on their performance as measured by patient outcomes. The whole idea is to reward quality care and get away from the old fee-for-service model.

Related: Maryland Hospitals May Be Paid for Keeping People Out

However, the expert panel, created by the National Quality Forum, said in a draft report first obtained by The New York Times that the current approach is severely flawed because it does not take into account the socioeconomic status of patients at each hospital.

They say this is problematic because low-income patients are less likely to have successful outcomes, since they may not be able to afford medication or transportation to get to their treatments and follow-up appointments.

This means hospitals treating low-income people may be unfairly labeled as “poor performers” and get slapped with penalties. The panel noted that major teaching hospitals that serve large populations of poor people face the highest penalties—though it did not provide specific cost estimates.

Without proper adjustments for socioeconomic factors, “providers may have fewer resources to treat disadvantaged populations,” the panel said.

Related: How Medicare Data Could Revolutionize Health Care

Hospital trade groups like the American Hospital Association say measuring provider care by patient outcomes without considering socioeconomic behaviors misrepresents the real quality of care in each hospital.

“The public could be misled into believing the care provided by those serving disadvantaged communities is of lesser quality than it actually is, and that the care provided by those serving the more advantaged populations is better than it actually is,” Richard Pollack, Executive Vice President of the American Hospital Association said in a letter to the panel.

The experts also worry that the current policies could result in fewer quality doctors for poor people, since providers will be less inclined to serve these populations for fear of being labeled a poor performer.

The panel recommends adjusting the pay for performance criteria to include adjustments for socioeconomic factors.

Related: The Hidden Price of Poverty

However, the administration disagrees and said doing so would mean lowering expectations for hospitals that serve poor people.

“We do not want to hold hospitals to different standards of care simply because they treat a large number of low-socioeconomic-status patients,” Dr. Kate Goodrich, the director of quality measurement programs at the federal Centers for Medicare and Medicaid Services told The New York Times.

“Our position has always been not to risk-adjust for socioeconomic status within our measures because of concern about masking disparities, and potentially rewarding providers who provide a lower level of care for minorities or poor patients.”

One middle ground proposal, offered by the panel, would compare hospitals and doctors with a peer group of providers serving a similar pool of low-income patients.

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.