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Pay-for-performance programs are receiving substantial attention, but we have relatively little evidence about their effects on quality of care. In March 2003, the Centers for Medicare and Medicaid Services (CMS) invited 421 hospitals to participate in a pay-for-performance demonstration project.
Participating hospitals submitted data on 33 quality measures for five clinical conditions, including acute MI (AMI), heart failure (HF), and pneumonia. Hospitals in the top decile on a composite measure of performance at 2 years were promised a 2% bonus payment above usual Medicare reimbursement. Two hundred seven hospitals agreed to participate and were matched with 406 control hospitals that had public reporting but were not project participants.…