• Christopher P Scally, Jyothi R Thumma, John D Birkmeyer, and Justin B Dimick.
• University of Michigan, Department of Surgery, Center for Healthcare Outcomes and Policy, Ann Arbor, MI.
• Ann. Surg. 2015 Aug 1;262(2):249-52.

ObjectiveTo examine the financial impact of quality improvement using Medicare payment data.BackgroundDemonstrating a business case for quality improvement--that is, that fewer complications translates into lower costs--is essential to justify investment in quality improvement. Prior research is limited to cross-sectional studies showing that patients with complications have higher costs. We designed a study to better evaluate the relationship between payments and complications by using quality improvement itself as a measured outcome.MethodsWe used national Medicare data for patients undergoing general (n = 1,485,667) and vascular (n = 531,951) procedures. We calculated hospitals' rates of serious complications in 2 time periods: 2003-2004 and 2009-2010. We sorted hospitals into quintiles by the change in complication rates across these time periods. Costs were assessed using price-standardized Medicare payments, and regression analyses used to determine the average change in payments over time.ResultsThere was significant change in serious complication rates across the 2 time periods. The top 20% of hospitals demonstrated a 38% decrease (14.3% vs 11.6%, P < 0.001) in complications; in contrast the bottom 20% demonstrated a 25% increase (11.1% vs 16.5%, P < 0.001). There was a strong relationship between quality improvement and payments. The top hospitals reduced their payments by $1544 per patient (95% confidence interval: $1334-1755), whereas the bottom of hospitals had no significant change (average $67 increase, 95% confidence interval: -$123 to $258).ConclusionsHospitals that reduced their complications over time had significant reductions in Medicare payments. This demonstrates that payers are clearly incentivized to invest in quality improvement.

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