Outcome-Based Performance Measurement Is Becoming the Norm

Hospitals across the country are being pushed and dragged into outcome-based performance measurement systems with increasing incentives for providing quality care and better outcomes. Proponents argue that such systems discourage unnecessary treatments, keep people healthier, and reduce overall costs.


Janet Adams reports in today’s Wall Street Journal ("Wellpoint Shakes Up Hospital Payments," May 16, 2011, B1) that Wellpoint Inc. is raising the stakes for 1,500 hospitals in 14 states serving 34 million people on its Blue Cross Blue Shield plans by cutting off annual payment increases to the hospitals if they fail to deliver quality patient care. Under the new system, Wellpoint will pay increases only to those hospitals that earned them by scoring high enough on outcome measures of treatment quality including how satisfied patients were with the care they received. The change is part of a broader trend in the health care industry toward a compensation approach for health care providers based on the quality of their care, instead of the number of tests performed or treatments provided.

Predictably, hospital insiders are pushing back. “We don’t have good outcome measures yet,” Chip Kahn, president of the Federation of American Hospitals, is quoted saying by the Wall Street Journal. “Many things will happen 30 days [after discharge] that have nothing to do with the hospital care.” Of course, this sounds like the all-too familiar retort for any kind of outcome-based performance measurement system (see “Ten Reasons Not to Measure Court Performance,” Made2Measure, November 19, 2008).

While the incentives and operating environment of hospitals and the health care industry differ from those facing courts and justice systems, I believe that court leaders and managers ignore this broad trend toward outcome-based performance measurement and accountability at their peril. (See also “Measurement of Hard Outcomes Trumps Process Measurement (Again)," Made2Measure, October 21, 2010)







Popular posts from this blog

Top 10 Reasons for Performance Measurement

There is a growing demand of “show me the data” from citizens and taxpayers, legislators, executive agencies, oversight boards and communities – all of whom exchange money and other support (e.g., trust and confidence) for services -- that courts can ill afford to ignore. Courts need to measure their performance to meet the demand for public accountability. But the benefits of court performance extend beyond accountability including improved prediction, better understanding and control, influence, a sharpened focus on what is important, and discovery of better practices. Objective performance data is central to good management practices like strategic planning, performance-based budgeting, Balanced Scorecards, Total Quality Management (TQM), and Six Sigma. Performance measures allow court leaders and managers, policymakers, legislators and the public to evaluate court programs’ inputs (the resources allocated), outputs (direct results of program or service activities) and outcomes (bro...
Read more

Q & A: Outcome vs. Measure vs. Target vs. Standard

Q: Those of who write and speak about court performance measurement rely on their share of jargon -- and it's often confusing. What are the differences among the terms “outcome,” “measure,” “target” and “standard”? A: Socrates said that the beginning of wisdom is definition. We’ll see. Outcomes are the benefits or changes for the intended beneficiaries of a court’s programs and services. Outcomes may relate to knowledge, skills, attitudes, values, behavior, condition or status of the program participants or recipients of services. Examples include litigants' satisfaction with a court's courtesy and responsiveness, success of probation, time to case disposition, clarity of orders, integrity of case files, percent of mediation agreements, enforcement of orders, and perceived fairness of proceedings, as well as percent of expected expenditures and percent of revenues received. Outcomes should not be confused with the activities of those who run the court. (See the October 1...
Read more

Taming “Wild Problems”: Measure Everything That Matters

Every problem is not solvable, but every problem is measurable. This assertion is the key to tackling problems in public services including courts, business, and life in general. Surprising to me is that even astute scholars take exception to this, among them  is Russ Roberts, the John and Jean De Nault Research Fellow at Stanford University’s Hoover Institution, the president of Shalem College in Jerusalem, and host of the award-winning podcast EconTalk: Conversation for the Curious. The belief that certain things, dubbed “wild problems” by Professor Roberts, cannot be measured does a disservice to courts and other public and private organizations. There are many benefits to measuring everything that matters. It allows organizations to   focus on and to operationalize the most important problems and issues facing them,   to track progress over time and identify areas of improvement,   to compare their performance to that of other organizations and learn from the d...
Read more