The point that Dr. Greeno finds most frustrating is the vast difference of opinion on gainsharing versus another payment trend. “The irony is that all gainsharing is pay-for-performance,” says Dr. Greeno. “The difference is that instead of Medicare paying, it’s the individual hospital paying for performance. Even people who really understand healthcare haven’t connected the dots. They’re pushing for pay-for-performance, but telling hospitals they can’t do essentially the same thing. The hospital industry is developing a strategy to point that out to Capitol Hill, and in my opinion, SHM should develop a more formal approach to do the same.”
Current State of Gainsharing
There have been a few gainsharing programs that were approved by the OIG. “There are a couple of [pilot programs] that private hospitals have done,” says Dr. Greeno. “All the projects so far have targeted medical devices. One New Jersey hospital focused on the use of defibrillators. They spent a lot of money setting up the project, which only lasted one year. As I said, these [approved projects] are very limited.”
Gainsharing programs that focus on medical devices are simple because cost savings are easy to track; however, gainsharing could be built around quality indicators that are found in pay-for-performance programs. “Cutting costs is not the only way to improve quality,” says Dr. Greeno. “That’s not how you get the biggest bang for your buck. That comes when someone will invest in capabilities and processes that target the 30% of costs spent on each patient in the hospital that is waste.”
Pilot Programs Planned
Following the OIG reversal, Congress passed the Deficit Reduction Omnibus Reconciliation Act of 2005, which included funding for a gainsharing demonstration project. The Centers for Medicare and Medicaid Services (CMS) will establish six gainsharing pilot programs, including two in rural settings, by January 1, 2007. The bill states that these demonstration programs are intended to “test and evaluate methodologies and arrangements between hospitals and physicians designed to govern the utilization of inpatient hospital resources and physician work to improve quality and efficiency of care provided to Medicare beneficiaries.”
You can review details on the gainsharing demonstration on the CMS Web site at www.cms.hhs.gov/DemoProjectsEvalRpts/MD/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=3&sortOrder=ascending&itemID=CMS1186805.
A second new CMS demonstration program will go beyond the traditional concept of gainsharing. Under the program, known as the Physician-Hospital Collaboration Demonstration (PHCD), hospitals would be allowed to pay physicians a portion of the savings they reap from specific quality improvement and efficiency initiatives. This project, in particular, could eventually have direct implications for hospital medicine.
The SHM Public Policy Committee is urging members to consider soliciting involvement with PHCD, and possibly partnering with other physician groups and affiliated hospitals to compete for inclusion. You can find more on the PHCD online at www.cms.hhs.gov/DemoProjectsEvalRpts/MD/itemdetail.asp?filterType=none&filterByDID=99&sortByDID=3&sortOrder=ascending&itemID=CMS1186653. If you decide to submit a proposal to CMS for the PHCD, please let Joe Miller at SHM ([email protected]) know.
The Future of Gainsharing
Will the CMS gainsharing pilot programs lead to widespread trials? “Who knows?” asks Dr. Greeno. “It will be a slow crawl toward some type of application, but it will likely be too limited when it does happen.”
In the meantime, Dr. Greeno is urging SHM and individual physicians to keep pushing for some real advances in gainsharing. “Our best chance is to work with the hospital community to connect the dots for our federal lawmakers,” he says. “We want to work to allow hospitals to reward doctors for quality performance.” TH