Pay-for-Performance and Quality Improvement in Rural Hospitals

Research center:
Lead researcher:
Project funded:
September 2004
Project completed:
February 2007

This project has three primary purposes:

  • To estimate the impact on rural hospitals in the U.S. of a pay-for-performance (PFP) program similar to the CMS-sponsored Premier, Inc. Hospital Quality Incentive Demonstration
  • To complete a synthesis of the major factors that will influence the inclusion of rural hospitals in PFP programs
  • To make recommendations for the design of PFP programs that will appropriately reward rural hospitals for improving quality.

This project will empirically assess how rural hospitals in the U.S. would fare financially (i.e., receive bonus payments, be eligible for reduced DRG payments) if they participated in the CMS-sponsored Premier Hospital Quality Incentive Demonstration (HQID); identify and thoroughly examine the key factors that facilitate or constrain rural hospital participation in pay for performance programs; and describe options for the design of pay for performance programs that are relevant for rural hospitals that seek quality improvement. This study will use data from several sources, including data on the CMS 7th Scope of Work measures and data from a telephone survey of key representatives from major stakeholders (e.g., CMS, Premier, AHA, rural hospitals, rural relevant physician associations) involved with pay-for-performance projects.