Comparison of Change in Quality of Care Between Safety-Net and Non-Safety Net Hospitals

Quality of care improvement programs, such as bonuses for top performing hospitals, could end up penalizing safety-net hospitals and aggravating existing disparities between safety-net and wealthy hospitals. Performance-monitoring requirements also could add to financial burdens of already strapped safety-net hospitals.

Incentive programs to improve quality of care are often proposed by policy-makers seeking to improve services at hospitals. Hospitals that serve low-income and minority patients (safety-net hospitals) often have lower quality of care. However, researchers have begun examining how such incentive programs and public reporting of data may affect these safety-net hospitals. In theory, incentive programs could reinforce a two-tier system, with minorities and low-income patients having access only to the lower tier, and improvement measures that require tracking and monitoring may require resources that safety-net hospitals lack. Generally, policy-makers agree that such quality improvement efforts should not worsen health disparities along their way.

This longitudinal study examined changes in disparities in care quality over time at safety-net and nonsafety-net hospitals. The authors also estimated how the pay-for-performance program currently being piloted by Medicaid might affect financial performance of safety-net hospitals. The analysis included 3,665 hospitals.

Key Findings:

  • Hospitals with high percentages of Medicaid patients had smaller improvements over time, and worse baseline performances than hospitals with low percentages of Medicaid patients.
  • Hospitals with lower percentages of Medicaid patients had larger performance gains in treating heart failure, pneumonia and acute myocardial infarctions.
  • Hospitals with more Medicaid patients were more likely to incur financial penalties due to low performance and were less likely to receive bonuses.

This study supports the authors' concerns that safety-net hospitals may suffer under the current Medicaid pilot, or other programs, to improve quality of care. They suggest that instead of basing payment on target thresholds, such as performing in the top 10 percent of all hospitals, that hospitals could receive bonuses each time appropriate care is delivered. Alternative reward systems such as this might help prevent safety-net hospitals from getting poorer while already rich hospitals get richer.