Pay-for-performance reduces health care spending and improves quality of care in Korea: Analysis of target and non-target obstetrics and gynecology surgeries (2011-2014)

Abstract

Objective : In Korea, the Value Incentive Program (VIP) was first applied to selected clinical conditions in 2007 to evaluate the performance of medical institutes. We examined whether the condition-specific performance of the VIP resulted in measurable improvement in quality of care and in reduced medical costs.

Design : Population-based retrospective observational study.

Setting : We used two data set including the results of quality assessment and hospitalization data from National Health Claim data from 2011 to 2014.

Participants : Participants who were admitted to the hospital for obstetrics and gynecology were included. A total of 535 289 hospitalizations were included in our analysis.

Methods : We used a generalized estimating equation (GEE) model to identify associations between the quality assessment and length of stay (LOS). A GEE model based on a gamma distribution was used to evaluate medical cost. The Poisson regression analysis was used to evaluate readmission.

Main Outcome Measures : The outcome variables included LOS, medical costs and readmission within 30 days.

Results : Higher condition-specific performance by VIP participants was associated with shorter LOSs, decreases in medical cost, and lower within 30-day readmission rates for target and non-target surgeries. LOS and readmission within 30 days were different by change in quality assessment at each medical institute.

Conclusions : Our findings contribute to the body of evidence used by policy-makers for expansion and development of the VIP. The study revealed the positive effects of quality assessment on quality of care. To reduce the between-institute quality gap, alternative strategies are needed for medical institutes that had low performance.