Impact of Pay-for-Performance Reimbursement at Safety-Net Hospitals


The study findings suggested that lower quality-of-care scores could decrease hospital payments, which could possibly increase health disparities for at-risk patients with cancer.

An evaluation of the quality of care received at safety-net hospitals and the impact of pay-for-performance reimbursement found that hospitals caring for patients who were uninsured or underinsured have decreased quality-of-care measures.

Further, under pay-for-performance reimbursement models, lower quality-of-care scores could decrease hospital payments, which could possibly increase health disparities for at-risk patients with cancer. These findings, published in Cancer, reflect the gaps in care faced by underserved patients.

“These differences in quality of care in part reflect the social and economic challenges faced by underserved patients,” the authors wrote. “As we move toward pay-for-performance health care, these quality gaps will translate into reimbursement gaps, which could in fact exacerbate health disparities among the underserved population.”

Researchers identified 1,703,865 patients with cancer who were diagnosed between 2004 and 2015 and treated at 1344 hospitals. Of note, hospital safety-net burden was defined as the percentage of uninsured or Medicaid patients cared for by that hospital, categorizing hospitals into low-burden, medium-burden, and high-burden hospitals. The impact of safety-net burden was then compared with 20 standardized quality-of-care measures.

Overall, patients who were treated at high-burden hospitals were more likely to be young, male, Black and/or Hispanic, and to reside in a low-income and low-educated region.

“Hospitals ideally strive to provide equal care to all patients irrespective of their sociodemographic background; however, providing high-quality, timely care can prove challenging with the most underserved patients,” the authors explained.

High-burden hospitals were found to have lower adherence to 13 of the 20 quality measures compared with low-burden hospitals (all P < .05). Further, of the 350 hospitals deemed to be high-burden, concordance with quality measures was found to be lowest for those caring for the highest percentage of uninsured or Medicaid patients, minority patients, and less educated patients (all P < .001).

“This suggests that hospitals caring for the most at-risk patients may incur the highest financial penalties under pay-for-performance reimbursement models,” the authors noted.

According to researchers, one possible solution that may reduce the reimbursement gap would be adjusting quality scores for a patient’s race and socioeconomic status. However, this may also send a message that poor quality of care is acceptable at hospitals which care for underserved patients. Another possible approach highlighted by the investigators may be to compare hospitals based on their patient risk profile. Hospitals choosing to use this approach would need to carefully define hospital burden though.

“Regardless of the solution, researchers and policymakers should increase focus on health equity when considering reimbursement policies to help optimize patient care for the underserved,” the authors wrote. “Value-based reimbursement represents the future of health care; however, policymakers must remain cognizant of the impact that reimbursement policy has on an at-risk population.”


Sarkar RR, Courtney PT, Bachand K, et al. Quality of Care at Safety-Net Hospitals and the Impact on Pay-for-Performance Reimbursement. Cancer. doi: 10.1002/cncr.33137

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