Press Releases




Latest results of the Premier Hospital Quality Incentive Demonstration (HQID) show dramatic across-the-board improvement in the performance of participating hospitals.  Launched in October 2003 by the Centers for Medicare & Medicaid Services (CMS) and the Premier Inc. Healthcare Alliance, HQID involves about 250 hospitals in 36 states.


The demonstration was designed to test new payment systems under Medicare that would improve the safety, quality and efficiency of care delivered in the nation’s hospitals.  Given the series of reports issued over the past decade – starting with the Institute of Medicine’s 1999 landmark report “To Err is Human” – there is a growing awareness and well documented need for Medicare to change the way it pays for health care services.  The outcomes from the third year of this demonstration provide yet even more evidence that paying for performance in health care in these innovative Value-Based Purchasing (VBP) initiatives can dramatically improve the quality of health care delivered to hospital patients.


“These Premier results show that Value-Based Purchasing can achieve excellent results in Medicare,” said CMS Acting Administrator Kerry Weems.  “Given these results, it is time to take the next step and implement hospital Value-Based Purchasing for the Medicare program, so that citizens across the nation can benefit from improved safety and quality get the right care, every time.”


In November 2007, CMS submitted a proposal to Congress to implement Medicare VBP.  Within that proposal, a percentage of a hospital’s payment for each discharge would be contingent on the hospital’s actual performance on a specific set of measures.  Currently, Medicare pays a set amount for each discharge, whereas under VBP, amounts would be linked to quality of services provided, not just quantity of service.  Changing Medicare’s hospital payment methodology to reflect CMS’ implementation plan for VBP requires new legislation.


Hospitals participating in HQID include small/large, urban/rural, and teaching/non-teaching facilities that have volunteered to report their quality data for the following five high-volume inpatient conditions using national measures of quality care: acute myocardial infarction (AMI/heart attack); coronary artery bypass graft; heart failure; pneumonia; hip and knee replacement.  More than 30 nationally defined, standardized, risk-adjusted measures representing process of care, and patient outcomes, are being tracked to evaluate whether the care provided consistently meets accepted evidence-based practice standards.


Individual hospital improvements are striking.  Fifteen hospitals moved from “worst to first” rankings, moving from the bottom to the top fifth of hospitals in one or more clinical areas.  These hospitals improved by an average 32.6 percentage points in quality scores over three years.


“Persistent deficiencies in the level of quality of care delivered  in the U.S. health care system demand focus and attention by all,” said Weems.  “This demonstration and the leadership exhibited by Premier show us the way forward, and we are eager to work with Congress, the health care community and representatives from patient organizations to move forward to bring these new innovations to every American.  It is time to move forward and reward and encourage reliable, high quality care in all parts of Medicare.”


The quality measures were developed by government and private organizations, such as the National Quality Forum, the American Hospital Association and the Leapfrog Group. In addition, they have been tested by CMS, the Joint Commission on Accreditation of Healthcare Organizations and the Agency for Health Research Quality (for more information on the measures, go to:


The average composite quality scores (CQS), an aggregate of all quality measures within each clinical area, improved significantly between the inception of the program and the end of Year 3 (2006):


  • From 87 percent to 96 percent for patients with AMI (heart attack)
  • From 85 percent to 97 percent for patients with coronary artery bypass graft.
  • From 64 percent to 89 percent for patients with heart failure.
  • From 69 percent to 90 percent for patients with pneumonia.
  • From 85 percent to 97 percent for patients with hip and knee replacement.


The total increment in average CQS over HQID’s first three years is 15.8 percentage points.  Between HQID’s second and third years, the average CQS increase is 4.4 percentage points.


The top-performing 112 hospitals earned a total of $7.0 million in incentive payments for substantial and continual advancement in quality of care.  For the third year of HQID, Sacred Heart Medical Center, in Spokane, WA, received the highest quality incentive payment of $385,342 for achieving top performance in four of the five clinical areas.  


CMS has awarded more than $24.5 million over the first three years of the project. The HQID project was extended by CMS for an additional three years through September 2009.


For complete information about the HQID project and to view a list of those hospitals ranking in the top 50 percent in each focus area, visit