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Pay-for-performance programs effectiveness in healthcare: the case of the end-stage renal disease quality incentive program

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Abstract

This paper focuses on Medicare’s End-Stage Renal Disease Quality Incentive Program (QIP). QIP aims to promote high-quality services in outpatient dialysis facilities by tying their payments to their performance on pre-specified quality measures. In this paper, employing principal-agent theory, we examine the effectiveness of QIP by exploring the changes in various clinical/operational measures when they become a part of the program as a performance measure. We study five QIP quality measures; two are operational: hospitalization and readmission. And three others are clinical: blood transfusion, hypercalcemia, and dialysis adequacy. Overall, we observe a significant improvement in all QIP quality measures after being included in the program, except for readmission. We recommend adjusting the weight and redesigning the readmission measure for Medicare to incentivize providers to reduce readmission. We also discuss establishing care coordination and employing data-driven clinical decision support systems as opportunities for dialysis facilities to improve the care delivery process.

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Availability of data and materials

Part of the data used in this research is acquired from USRDS, and based on our data usage agreement, I am not allowed to share the data. The rest of the datasets are publicly available.

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Acknowledgements

Part of the data used in this research is provided by the United States Renal Data System (USRDS) that is much appreciated.

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  1. Department of Operations and Business Analytics, Lundquist College of Business, University of Oregon, Eugene, OR, 97403, USA

    Saeed Piri

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Disclaimer about the data used in “New Treatment and Control Groups Definition”: “The data reported here have been supplied by the United States Renal Data System (USRDS). The interpretation and reporting of these data are the responsibility of the author(s) and in no way should be seen as an official policy or interpretation of the U.S. government.”

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Piri, S. Pay-for-performance programs effectiveness in healthcare: the case of the end-stage renal disease quality incentive program. Eur J Health Econ 25, 221–236 (2024). https://doi.org/10.1007/s10198-023-01582-x

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