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Monday, October 15, 2012

Hospitals Penalized if You Are not Satisfied

ATLANTA—At Grady Memorial Hospital here, doctors are being taught to stop interrupting patients while they are speaking. Nurses recently got hand-held phones so patients can reach them instantly. New bedside comforts include cable sports channel ESPN and a menu featuring wild salmon.

Grady is making these changes in response to a shift in how the federal government pays hospitals for treating people on Medicare, the federal health-care program for seniors.

Dr. Michael Frankel, director of Grady's stroke center
Nearly $1 billion in payments to hospitals over the next year will be based in part on patient satisfaction, determined by a 27-question government survey administered to patients. Hospitals with high scores will get a bonus payment. Those with low ones will lose money.

The program is part of a much broader pay-for-performance system built into President Barack Obama's health-care overhaul. "I don't know anybody in my field who isn't totally preoccupied with it," said John M. Haupert, Grady's chief executive.

Many medical professionals have balked at the questionnaires, saying they are unfair. Older hospitals in inner cities, or facilities that tend to accept patients through cramped and busy emergency rooms, say their scores automatically suffer through no fault of their own.

Some hospitals were disappointed with early survey score results Medicare gave them this summer, sparking a flurry of service upgrades in recent months, said Quint Studer, founder of the Studer Group, a Florida-based health-consulting group.

The health law will cut $716 billion in Medicare spending growth over the next decade, the Congressional Budget Office estimates, largely by shaving payments to hospitals and insurers. The patient-satisfaction change isn't included in that total, as it will move the same pot of money between hospitals. But it uses the same carrots-and-sticks approach as the provisions designed to force spending cuts.

The pay-for-performance programs highlight a fundamental difference between the candidates in the 2012 presidential race. The Romney campaign says it would improve health care and lower costs by turning chunks of the system over to the private sector. The Obama administration wants to achieve the same goals by working within the existing system and lacing it with financial incentives, so health-care providers get paid when they perform and penalized when they don't.

The federal government since 2006 has surveyed patients on their hospital experience using the same standard questionnaire, but the survey scores didn't determine how much the federal government paid hospitals. That changed in July 2011, when survey results from about 3,500 hospitals—which includes most of those in the nation—were first used to calculate new payment rates that took effect this Oct. 1. Hospitals must complete at least 100 patient surveys over a year, though bigger hospitals will do far more. The survey isn't restricted to Medicare beneficiaries. Hospitals are audited to ensure they don't cherry-pick respondents.

The new payment rate combines hospitals' patient-satisfaction scores with a measure of whether hospitals follow a dozen procedural metrics for treating such things as heart ailments and pneumonia. For example, hospitals can get marked down if they don't immediately give patients medication during a heart attack.
Grady CEO John M. Haupert
Medicare will reduce its payments for hospitals by 1%, or an estimated $963 million for this fiscal year. It will then distribute the money to those hospitals with high scores. By 2017, the withholding will double to 2%.
The procedural metrics account for 70% of the score, and the satisfaction surveys make up 30% of the score. Hospitals say the money is significant as many operate on thin profit margins. They also say that while the survey scores are the smaller piece, they are harder to control.

Survey questions include: "How often did doctors treat you with courtesy and respect?" and "How often were your room and bathroom kept clean?" It asks patients to rate their stay on a scale of zero to 10.
Doctors and nurses say the customer isn't always right in medicine. Patients sometimes arrive armed with treatment ideas culled from the Internet and can leave unsatisfied when the doctor won't give them what they want.

"You go to Disney DIS +0.14% for a great vacation experience," said Dr. Rhonda Scott, Grady's chief nursing officer. "You go to Ruth's Chris for a great dining experience. Do you think it is a great experience when I tell you that you have stage-four cancer and you may be dead in three months?"

Donna Barnett, a senior nurse at Grady, cites a patient who had a hemorrhagic stroke and recovered swiftly enough to walk out of the hospital about a week later. On the survey the patient complained that meals were served cold and gave Grady low scores. "It makes you want to throw your hands up," said Ms. Barnett.
Federal officials say the scoring system is a reliable indicator of whether hospitals give good care. Officials say scores are adjusted for demographic and health differences between hospitals, and lower-scoring facilities earn points for improvement. They add that years of honing the questionnaire make it the most accurate measurement of the patient experience available.

"By far the majority of measures that we're looking at really have to do with communication," said Jean Moody-Williams, director of the quality improvement group within the agency that runs Medicare. "Those are things that are universal regardless of the state of your facility."

Roper Hospital in Charleston, S.C., scored above the national base line in every survey category and expects to earn an extra $87,000 in Medicare pay over the next year. The hospital tied managers' compensation to Roper's satisfaction-survey scores, and told room cleaners to ask patients whether they missed any spots. "They're not absurd questions," hospital CEO Matt Severance says of the survey. "They're very relevant to what we would want as a patient."

Other hospitals, which care for a greater share of uninsured and low-income patients, say they are at a disadvantage under the new system. There, patients enter urban hospitals through emergency rooms, where long waits leave them grumpy.

"We have some of the best infection-control outcomes in the state here, but if you looked at the equipment and furniture, it maybe is not as shiny and new as in a suburban hospital," said Kevin Slavin, president and CEO of East Orange General Hospital in New Jersey. In its first batch of survey scores, around half of patients gave the hospital an overall favorable rating. Mr. Slavin estimates the facility will lose $240,000 this coming year as a result of low satisfaction scores.

East Orange General Hospital has begun upgrading its televisions to flat screens to lift its scores. Other facilities are going so far as to put mini waterfalls in patients' rooms and adding daily newspaper delivery, Mr. Studer, the health consultant, said.

Some hospitals say certain questions in the survey are at odds with other goals. The questionnaire asks, "How often did the hospital staff do everything they could to help you with your pain?" Executives say that conflicts with an effort to curb abuse of powerful pain drugs.

Dr. Patrick Conway, chief medical officer at the agency that runs Medicare, said the agency may consider whether the question needs adjusting.

At Grady, one of the nation's largest hospitals that treats a high percentage of uninsured and low-income patients, the payment system is prompting changes. The hospital estimates it is spending $4 million on upgrades in an effort to raise its survey scores and earn a reputation for outstanding patient care.

In 1892, Atlanta opened the hospital and named it for newspaper editor Henry W. Grady, who worried the city's poor lacked medical care. It grew into a sprawling 953-bed public teaching hospital where 30% of the hospital's billings go unpaid by insurers, the government or patients.

Years of declining local funding and mismanagement brought Grady to the brink of closure in 2007. A dysfunctional billing system prevented the hospital from collecting all its payments, according to Grady officials. That year, Grady faced a $55 million operating deficit.

The hospital started turning around in 2008 when a new Grady board raised $300 million in donations to improve services. It digitized paper medical records, replaced rundown equipment and overhauled its billing. This year, it is on track to earn a surplus of about $1 million on revenues of $650 million, said Mr. Haupert, Grady's CEO.

Grady is considered a good hospital by some key measures. It handles some of the most difficult trauma cases in the region. And it rates above average for treatment of heart attacks and heart failure, according to the Joint Commission, an independent nonprofit that accredits hospitals. Its key re-admission and death rates are in line with the national average, Medicare data show.

Patients, however, aren't always so happy. When Grady's patient-experience scores began trickling in, "they were not what I would have wanted," Mr. Haupert said. Only 57% of respondents gave Grady an overall rating of nine or 10, compared with Medicare's national base line of 66%. Grady scored below the national base line on six of the survey's eight areas.

Mr. Haupert predicts the hospital will lose $230,000 in federal payments, mainly due to its low patient-experience scores.

Part of the problem is that about 85% of Grady's hospital admissions come through its busy emergency department, where the average length of stay is 7.2 hours, longer than the national average.

The hospital's reputation took a hit last year when a 60-year-old patient who showed signs of confusion died after accidentally falling from an unlocked 11th-story window. The hospital says it has since resolved such safety issues.

Naomi Black, a 59-year-old former childhood development teacher, brought her 34-year-old son to Grady's emergency room at 7 a.m. recently because he was having problems walking. By 4 p.m., he had gotten blood tests but still hadn't been cleared by a doctor, and Ms. Black's frustration with the wait was mounting.

"They don't really communicate with you," she said, adding she will opt for another hospital next time. Ms. Black couldn't be reached later to determine if her son was admitted and picked for a Medicare survey.
Bill Allocca, a 56-year-old popcorn salesman from Marietta, Ga., had never picked Grady because it is "where all the people that get shot go," he said. Then last year, he suffered a stroke and was airlifted there from a suburban hospital.

Mr. Allocca says physicians quickly performed surgery while staff comforted his family with blankets and steady communication. Three days later, he was back at work, and a satisfaction questionnaire arrived in the mail. Mr. Allocca gave Grady top marks. "In my case I was able to walk out of that hospital with a severe and a massive stroke," he said.

To make customers more satisfied, Mr. Haupert is deploying Dr. Scott, the chief nursing officer. An energetic woman with a Ph.D. in nursing science, Dr. Scott zips through the scuff-marked halls training nurses on a list of new techniques.

Nurses must now make rounds to patients' rooms every hour, instead of every two hours, to help patients use the bathroom and reposition them to prevent bedsores. Grady agreed to double the number of TV channels in rooms and add ESPN because "the requests for pain medicine go down during the afternoon football game," Dr. Scott said.

Doctors who practice at Grady have been instructed to stop talking to patients while standing over them in bed. Instead, they are encouraged to pull up a chair so they are at eye level. On a recent afternoon, Dr. Leon Haley Jr., chief of emergency medicine, breezed into a patient's room and squatted down low. "Hey there, how are you?" he asked the patient as he leaned in.

Dr. Scott now requires nurses to call patients after they are discharged to remind them about follow-up appointments and to answer medication questions. Nurses get scripts for the calls.

Dr. Michael Frankel, chief of neurology and director of Grady's stroke center, said doctors remain frustrated by patient-satisfaction scores because there is only so much they can do to improve them.

"When bad things happen to sick patients, a finger has to be pointed," he said. "We're expected to work miracles on patients, and sometimes that doesn't happen."

A version of this article appeared October 15, 2012, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: U.S. Ties Hospital Payments To Making Patients Happy.
Write to Janet Adamy at

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