Two related analyses included in this paper indicate that the Premier Hospital Quality Incentive Demonstration has made only a minimal, in any, impact on access to care for racial and ethnic minority patients. The regional analysis, evaluating whether minority patients living in market areas that are served by hospitals participating in the PHQID are treated at PHQID hospitals, shows a significant reduction in the proportion of patients that were treated in PHQID hospitals after the program was implemented only for Other Race Medicare beneficiaries with AMI admissions. Worth noting is that only one of the twelve separate statistical tests that were performed was rejected at p<.05, raising the possibility that the significant finding was due to chance. Further, the estimate of the reduction of AMI admissions for Other Race beneficiaries, relative to white beneficiaries, is only 1.5 percentage points, representing a small impact, and the reduction occurred largely before the commencement of the PHQID, casting doubt on whether the PHQID caused this reduction.
The CABG analysis shows little evidence that minority patients diagnosed with AMI became less likely, relative to whites, to receive CABG at PHQID hospitals after the PHQID was implemented. The only marginally significant evidence of a reduction in CABG occurred for Other Race beneficiaries: reductions in CABG rates for black, Latino, and all nonwhite patients as a result of the PHQID were not evident. As in the regional analysis, much of the reduction in CABG for Other Race beneficiaries occurred before the PHQID began, casting doubt on whether the PHQID caused this reduction. Sensitivity analysis shows that racial variations in the increase in the provision of PTCA for minority patients treated at PHQID hospitals were not observed.
To our knowledge, this is the first study to empirically test the effect of P4P on access to care for minority patients. The results from the CABG analysis conflict with those found by Werner et al. in their analysis of the effect of public quality reporting on CABG rates. The Werner et al. study employed a similar DIDID estimation strategy (examining whether minority patients experienced a decrease in CABG rates, relative to whites, in New York (which had the public reporting program) relative to comparison states, before and after the public reporting program began). They found that the New York public reporting program decreased CABG rates by 2.0 percentage points for blacks and by 3.4 percentage points for Hispanics (both significant at p<.01). The magnitude of these effects is stronger than those observed in the current study, perhaps due to the fact that mortality rates were not publicly reported at either the hospital or surgeon level in the PHQID, potentially decreasing the incentives to avoid minority patients.
Another potential reason why patient avoidance on the basis of race was not observed in this study is that physicians and hospitals in the PHQID did not have sufficient incentives to avoid patients on the basis of unobserved severity. Providers likely incur psychic costs as a result of avoiding patients because of financial incentives (McGuire and Pauly 1991
), and the expected financial benefits of doing so may have been too small to justify patient avoidance. This is particularly likely given the fact that quality was determined primarily by process performance (which is less sensitive to patient risk, and consequently patient avoidance) and given the relatively small magnitude of the performance incentives. Also, providers may not have perceived race to be related to unobserved severity: while suggests that minorities tend to have more observed severity than whites (which is largely accounted for in risk adjustment), minority patients may not have been perceived to have greater unmeasured severity.
Furthermore, evidence of minority patient avoidance may not have been observed due to the practice of exception reporting. Absent avoiding the treatment of minority patients, hospitals that feared that minority patients would decrease their quality scores could simply not count minority patients toward their quality performance. Known as exception reporting, hospitals in the PHQID had complete discretion to exclude patients from counting toward their quality performance. Some evidence suggests that exception reporting in public quality reporting is associated with increasing measured process quality (Doran et al. 2008
; Ryan et al. 2009
;). Consequently, PHQID hospitals may have disproportionately excluded minority patients from counting toward their quality scores if they thought that this would increase their scores. Research in this area in the United Kingdom's P4P program is mixed: Doran et al. (2008)
found some evidence that exception reporting was more likely for members of low-income households while also finding evidence that exception reporting was less
likely for racial and ethnic minority patients in the United Kingdom. Further research should examine the effects of exception reporting in P4P and public quality reporting programs and to determine, on net, whether it is a desirable element of these programs.
This study has a number of limitations. First, in the regional analysis, the defining of PHQID market areas by HRRs may be an inadequate means to determine potential patients for PHQID hospitals. However, given that a minimum of 65 percent of Medicare hospitalizations occur in HRRs in which beneficiaries live (Wennberg and Cooper 1996
), the misidentification of potential patients is likely not a major issue in this study. Second, the DIDID estimates in the CABG analysis are somewhat imprecise, making inference uncertain and potentially subject to Type II error. However, the effects observed in this study are consistently small while the direction of the effects is inconsistent, suggesting that large standard errors are not chiefly responsible for the null inferences. Third, the PHQID is a relatively small, voluntary pilot program consisting of less than 300 hospitals that are not representative of the population of U.S. hospitals (Ryan 2009
). As a result, the findings from this study may not be generalizable to other P4P programs. Fourth, while the PHQID applied to all patients, only its effect on Medicare patients was examined in this analysis. While the use of Medicare data standardizes insurance status across patients, it limits the generality of the findings to nonelderly patients, who may have a different unobserved risk profile than elderly patients. Furthermore, the classification of Medicare beneficiaries' race and ethnicity is not entirely reliable; specifically, recent research shows that many Asian and Hispanic beneficiaries are misidentified as being white (Eicheldinger and Bonito 2008
). This misidentificaion could have attenuated actual differences between whites and minorities that were examined in this study.