Small Gains Made by Gainsharing
While pay-for-performance has become one of the hottest trends in healthcare, another program that would tie payment to performance is starting to get some notice. Gainsharing is on the horizon for hospitals and the physicians who work for them, but the advances made in this savings-sharing model are questionable.
Gainsharing Defined
What is gainsharing? It has to do with the sharing of gains—or of costs saved, to be more precise. Under a gainsharing model, a hospital will select specific best practices, including standard policies, procedures, and/or protocols that will improve quality of care and reduce financial costs. Any reduction in costs that results from physicians following these best practices is documented by the hospital over a specified period. After monitoring and noting that physicians met the predetermined benchmarks for quality of care, the hospital then pays a cash bonus to those who contributed to the cost reduction.
Gainsharing can take various forms, but generally the practice applies to services provided within a single clinical specialty such as oncology or cardiac surgery. “Gainsharing could affect anyone who cares for patients in a hospital if it became legal,” says Ron Greeno, MD, FCCP, chief medical officer, Cogent Healthcare, Irvine, Calif., “but hospitalists are the perfect group of doctors to take on projects like this.”
The most recent gainsharing programs have focused on the use of pre-approved medical devices, equipment, and supplies. For example, a hospital might recommend that physicians use less costly items with the same level of effectiveness, such as a knee-high sequential compression device rather than a thigh-high device.
How much money is involved in gainsharing? Of course, it depends on the program. “Gainsharing deals could include significant money depending on how they are structured,” explains Dr. Greeno, “if you did something that results in enough quality benefit.”
Example: A hospital asked a physician group to give an appropriate antibiotic to patients as soon as possible upon admission and was consequently able to show that they avoided a prolonged stay for five of those patients and that this saved the hospital $1 million in costs. “If the hospital gave 50% of that savings to 20 physicians who helped meet that goal, why would anyone want to regulate against that?” asks Dr. Greeno.
A Brief History of Gainsharing
There is a good reason you may not have heard much about gainsharing; the practice was banned in 1999 by the federal Office of Inspector General (OIG). The OIG was concerned that gainsharing could limit patient care and might lead to physicians “cherry picking” patients who are healthier, while sending seriously ill patients to a different hospital.
Only in September 2005 did the OIG carry out a half-hearted reversal, providing advisory opinions that allow pre-approved arrangements between individual hospitals and physician groups—as long as appropriate safeguards are adopted to protect against abuse.
“This was a very small change,” says Dr. Greeno. “Their approval is highly limited. They have basically agreed to very specific, very short trials of gainsharing, which they will approve one at a time.”
Dr. Greeno is frustrated by the baby step taken by the federal government. “The OIG equates gainsharing with denial of care,” he says. “Their limits are preventing a tremendous opportunity for hospitals and physicians to partner to provide quality care; they’re saying we can’t provide the right incentive scheme.”
