Public reporting and pay-for-performance programs in perioperative medicine

Are they meeting their goals?

Author and Disclosure Information


Public reporting and pay-for-performance reimbursement are two strategies designed to stimulate hospital quality improvement. Information about the quality of hospital care (including surgical volumes and staffing, process-based measures, and mortality and other outcomes) is compiled on various Web sites, giving the public means to compare providers. While public reporting has been shown to foster quality-improvement activities by hospitals, its effects on clinical outcomes are less certain. Likewise, consumers’ awareness and use of publicly available hospital and provider quality data have been low but appear to be increasing.


  • Public reporting programs have expanded in recent years, driven by national policy imperatives to improve safety, increased demands for transparency, patient “consumerism,” and the growth of information technology.
  • Hospital-based pay-for-performance programs have had only a minor impact on quality so far, possibly because financial incentives have been small and much of the programs’ potential benefit may be preempted by existing public reporting efforts.
  • These programs have considerable potential to accelerate improvement in quality but are limited by a need for more-nuanced process measures and better risk-adjustment methods.
  • These programs may lead to unintended consequences such as misuse or overuse of measured services, “cherry-picking” of low-risk patients, or misclassification of providers.
  • Continued growth of the Internet and social-networking sites will likely enhance and change the way patients use and share information about the quality of health care.



Hospital quality measures and rankings are now widely available to the public online, but is public reporting of this information an effective strategy for improving health care? Using a case study of a hospital that suffered negative publicity as a result of a quality report, this article explores the use of public reporting of performance data and pay-for-performance reimbursement strategies to foster quality improvement in the US health care system.


In September 2005, The Boston Globe ran a prominent story reporting that the UMass Memorial Medical Center in Worcester, Mass., was abruptly suspending its elective cardiac surgery program.1 The program’s suspension came after state public health officials presented UMass Memorial with a detailed analysis showing that the hospital’s mortality rate for coronary artery bypass graft surgery (CABG) patients was the highest in the state and almost double the average for Massachusetts hospitals.1

Key personnel from UMass Memorial described the events preceding and following the program’s suspension in a journal article published in 2008.2 In 2002, UMass Memorial hired a new chief of cardiothoracic surgery, who resigned in early 2005. A few months after that resignation, state public health officials alerted the hospital to the abovementioned CABG mortality data (from 2002 and 2003), which they said would soon be reported publicly. UMass Memorial then conducted an internal review of its data from the most recent years (2004 and 2005) and found that its risk-adjusted CABG mortality had actually worsened, at which point the hospital voluntarily suspended its cardiac surgery program.2

More news stories arose about UMass Memorial’s program and its problems. The hospital hired consultants and senior surgeons from around the state and New England to completely review its cardiac surgery program. They concluded that “many essential systems were not in place” and made 68 key recommendations, including a complete overhaul of the hospital’s quality-improvement structure. The prior cardiac surgeons departed.2

The cardiac surgery program resumed after a 6-week hiatus, with day-to-day supervision by two senior cardiac surgeons from a Boston teaching hospital. A nationally recognized cardiac surgeon was brought on as chief of cardiac surgery in January 2006. In the 18 months after the program resumed, risk-adjusted CABG mortality rates declined substantially, but patient volume failed to return to presuspension levels and the hospital reported $22 million in lost revenue in fiscal year 2006 as a result of the suspension.2

This case raises a number of questions that help to frame discussion of the benefits and risks of public reporting of hospital quality measures:

  • To what extent does public reporting accelerate quality improvement?
  • How typical was the subsequent mortality reduction reported by UMass Memorial—ie, can public reporting be expected to improve outcomes?
  • Was the effect on patient volume expected—ie, how much does public reporting affect market share?
  • Would a pay-for-performance reimbursement model have accelerated improvement?
  • Why do public reporting and pay-for-performance programs remain controversial?
  • Do patients have a right to know?


Drivers of public reporting

Massachusetts is one of a number of states that publicly report outcomes from cardiac surgery and other procedures and processes of care. Three basic factors have helped drive the development of public reporting (and, in some cases, pay-for-performance) programs:

  • National policy imperatives designed to improve quality and safety and to reduce costs
  • Cultural factors in society, which include consumerism in health care and the desire for transparency
  • The growth of information technology and use of the World Wide Web, which has been a huge enabler of public reporting. Public reporting could be done prior to the Web era but would not have reached such a wide audience had the results been released in a book that had to be ordered from a government printing office.

The rationale for public reporting

In theory, how might public reporting and pay-for-performance programs improve quality? Several different mechanisms or factors are likely to be involved:

  • Feedback. The basic premise of the National Surgical Quality Improvement Program, to cite one example, is that peer comparison and performance feedback will stimulate quality improvement.
  • Reputation. Hospital personnel fear being embarrassed if data show that they are performing poorly compared with other hospitals. Likewise, in recent years we have seen hospitals with the best quality rankings publicly advertise their performance.
  • Market share. Here the premise is that patients will tend to select providers with higher quality rankings and shun those with lower rankings.
  • Financial incentives. Pay-for-performance programs link payment or reimbursement directly to the desired outcomes and thereby stimulate quality improvement without working through the abovementioned mechanisms.

Approaches to quality measurement

Public reporting of hospital performance requires selection of an approach to measuring quality of care. Generally speaking, measures of health care quality reflect one of three domains of care:

Structural (or environmental) aspects, such as staffing in the intensive care unit (ICU), surgical volume, or availablity of emergency medical responders. An example of a structure-oriented reporting system is the Leapfrog Group’s online posting of hospital ratings based on surgical volumes for high-risk procedures, the degree of computerized order entry implementation, and the presence or absence of various patient safety practices.3

Processes of care, such as whether beta-blockers are prescribed for all patients after a myocardial infarction (MI), or whether thromboprophylaxis measures are ordered for surgical patients in keeping with guideline recommendations. Examples of process-oriented reporting systems include the US Department of Health and Human Services’ Hospital Compare Web site4 and the Commonwealth Fund’s site.5

Outcomes of care, such as rates of mortality or complications, or patient satisfaction rates. An example of an outcomes-oriented reporting system is the annual report of institution-specific hospital-acquired infection rates put out by Pennsylvania6 and most other states.


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