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Incorporating nursing quality indicators in public reporting and value-based purchasing initiatives


Since 2000, initiatives for improving the quality of health care have relied increasingly on public reporting of quality indicators and reimbursement structures that reward high-quality care provided in an efficient manner. Nursing has been underrepresented in these initiatives. This article reviews the history of public reporting and incentive payment initiatives and describes current activities in this field.

Setting the scene

Several reports from the Institute of Medicine (IOM) have raised concern about healthcare safety and quality. The first report (1999) revealed that preventable adverse events are a leading cause of death in the United States. The second (2001) described deficiencies in hospitals regularly using established best-care practices; it recommended the use of incentive payments, also known as pay-for-performance or value-based purchasing (VBP), as well as public reporting of performance to improve quality. Public reporting and VBP have remained at the forefront of quality initiatives.

A 2006 Executive Order mandated federal agencies to measure and make available results on the quality of healthcare delivery and align incentives so all stakeholders benefit when the focus is on delivering quality health care at the lowest cost. The order implemented public reporting and VBP as strategies for achieving quality improvement. Recent rules issued by the Centers for Medicare & Medicaid Services (CMS) for an inpatient prospective payment system call for elimination of reimbursement for selected hospital-acquired conditions (HACs) and participation in a systematic clinical data registry for nursing-sensitive care.

Quality-measurement indicators can pertain to structure, process, or outcome. (See Categories of quality-measurement indicators by clicking on the PDF icon above.)

Public reporting

Public reporting entails publishing predetermined quality and efficiency measures. The goal is to give stakeholders and consumers access to information showing the pro­vid­er’s performance so they can make more informed healthcare decisions. Public reporting may influence providers’ professional reputations, enhancing providers’ interest in quality-improvement efforts. What’s more, better scores on quality, efficiency, and cost measures may guide patients toward higher-quality care. Public reporting systems commonly are foundational components of VBP initiatives.

VBP payment models

The National Committee for Quality Healthcare defines VBP as a payment program that provides financial rewards to providers who achieve certain performance expectations. The purpose is to reimburse high-quality providers at a higher rate. The two primary reimbursement strategies are financial incentives and beneficiary referrals.

VBP models incentivize pro­viders using three main strategies—financial reimbursement, beneficiary referrals, and public reporting. Financial reimbursement, in turn, may follow one of these four models:

  • Reward providers for achieving a predetermined performance level. This incentive structure assesses hospitals on an absolute rather comparative achievement level. Thus, all hospitals achieving a specified performance level are eligible for incentive payment.
  • Provide financial incentives only to top performers (generally, those that fall above a set percentile). For example, to receive an incentive payment, a hospital must be in the top quartile of participants. Thus, not all hospitals can receive incentives at the same time.
  • Reward providers for improving their quality and efficiency scores. Even if a hospital is in the top quartile, it doesn’t receive an incentive payment if its achievement trend declines. On the other hand, if a hospital in the bottom quartile improves, it does receive an incentive payment.
  • Include disincentives, which retract payments for medical errors as a penalty for providers of low-quality services.

In practice, VBP programs commonly incorporate a mixture of financial reimbursement, beneficiary referrals, and public reporting and a mixture of the four financial reimbursement models. Many VBP programs focus on physician reimbursement, while others focus on hospital reimbursement. To date, little evidence supports the effectiveness of VBP programs in promoting quality improvement.

Current initiatives

The remainder of this article explores current initiatives to incorporate nursing quality indicators in VBP.

Centers for Medicare & Medicaid Services

A CMS ruling identified new structural measures, including participation in a systematic clinical data registry for nursing-sensitive care and reporting on such HACs as pressure ulcers and falls. In 2001, CMS attempted to strengthen the relationship between payment and quality by expanding on quality-measure reporting. A CMS rule proposed for 2011 would have required facilities to report on one of four registry-based topic areas, one of which was nursing-sensitive care, via a nursing registry using the set of 12 nursing measures established by the National Quality Forum (NQF). Although this ruling was tabled, CMS clearly understands the importance of nursing’s role in ensuring quality care.

Agency for Healthcare Research and Quality

The Agency for Healthcare Research and Quality has developed three modules measuring various aspects of quality—prevention quality indicators, inpatient quality indicators, and patient-safety indicators. Components from these quality indicators have been incorporated into both private and public VBP demonstration projects.


California’s VBP program rewards improvements in physician organization quality. Several other states have established public reporting and VBP programs. Massachusetts has public reports on physician quality and is one of the few states where health plans have widely implemented VBP initiatives.

In 2009, more than 250 pay-for-performance programs existed nationwide; almost half targeted hospital care. State Medicaid departments sponsored 18% of these, health insurers 66%, employers 11%, and Medicare 5%. By 2011, an estimated 85% of state Medicaid programs will operate pay-for-performance programs. About 70% of current Medicaid performance-based payment programs operate in managed-care or primary-care case management environments. Some involve nursing homes or behavioral health providers. Most focus on preventive health and children, adolescent, and women’s health. Several states participate in multipayer pay-for-performance programs.

Prevalence of use

Many public reporting programs don’t use nursing-specific indicators; no VBP programs use them. In most quality measure sets, indicators focus on physician practices and medical processes. With nurses serving as the main care providers in hospitals, their role in quality health care needs to be understood in detail and incorporated strategically into systems of outcome measures and VBP programs.

With increased interest and expansion of the VBP program by CMS, hospital-acquired infections (HAIs) will be reported to CMS by the Centers for Disease Control and Prevention’s National Center for Health Statistics. In 2011, some HAIs to be reported are nursing-sensitive, including central line–associated bloodstream infections, ventilator-associated pneumonia, and catheter-associated urinary tract infections.

In 2004, NQF endorsed a set of nursing-sensitive quality standards (indicators). In 2009, it moved away from provider-specific measures, although it re-endorsed 12 of the original 15 nursing measures. (For a list of NQF-endorsed nursing-sensitive measures, see NQF consensus standards related to nursing care by clicking on the PDF icon above.)

ANA’s National Database of Nursing Quality Indicators® (NDNQI®) collects data on 11 of the 12 NQF-endorsed measures, along with other measures, as a quality-improvement tool for hospitals and nurses. More than 1,700 hospitals participate in the database. NDNQI hospitals are able to receive state, regional, and national comparisons. With continued interest in public reporting and to decrease hospitals’ burden, in some instances NDNQI promotes direct reporting at the state level.

Maine, Colorado, and Texas hospitals collect data on nursing-sensitive indicators due to mandates requiring public reporting. Many other states are exploring legislation to report data or collaborate with stakeholders to report data voluntarily.

Although nursing-sensitive indicators aren’t well represented in public reporting and VBP initiatives, the nation’s 3.1 – 3.6 million registered nurses (RNs) provide a much larger portion of direct patient care than do other health providers. This gives them more opportunities to affect patient care, and links hospitals’ quality of care to nursing staff performance. IOM’s 2010 report The Future of Nursing: Leading Change, Advancing Health stresses that nursing has the potential to bring far-reaching changes to the healthcare system. The 2010 Patient Protection and Affordable Care Act underscored the economic value of nurses’ contributions across practice settings.

VBP discussion tools for nurses

As an additional response to the many efforts to move toward VBP, in 2010 ANA’s Congress of Nursing Practice and Economics developed ANA’s Principles of Pay for Quality, which provide a tool for nurses engaging in VBP discussions. These 10 principles identify nurses’ own need for professional accountability, ongoing knowledge development of quality concepts, recognition of the importance of an adequate nurse workforce to support quality outcomes, and the importance of gathering and reporting performance data. These principles apply to nurses in every role and setting and at every educational level.

Obstacles to incorporation

Multiple factors contribute to the dearth of nursing-specific indicators in VBP. One author suggested few nursing-sensitive indicators have been incorporated in VBP initiatives because the nature of nursing activities make them hard to measure. Nurses modify the care they provide based on individual patients’ needs. Each patient receives slightly different care, and developing indicators applicable to each patient’s care is challenging. The Joint Commission recommends use of indicators that minimize the measurement burden.

Also, healthcare payment systems don’t reimburse nurses directly for the care they provide. Typically, nursing costs are included in a patient’s room charge; nurses aren’t paid directly by insurers. If nursing indicators were to be incorporated in VBP programs, nursing costs might need to be unbundled from room and board charges. Alternatively, reimbursement for nursing care would be directed to the hospital without specific linkages to the nursing budget, perpetuating a payment philosophy that hasn’t recognized and reinvested in nurses’ economic value. In contrast, direct payment and billing systems exist for physicians, supporting the development of physician-practice VBP programs. Advanced practice RNs are eligible to take advantage of those systems alongside their physician counterparts.

Finally, the selection of quality measure sets should incorporate information on an individual measure’s validity and reliability. Evidence on the relationship between nursing-workforce characteristics and processes and patient outcomes is growing. A model for building the case for RNs’ economic value examines the cost savings resulting from adding even one full-time nurse to a clinical unit to reduce negative outcomes. For nursing to be included in VBP programs, a stronger case for nurses’ contributions to efficient quality of care must build on these efforts.

Boosting representation of nursing-specific indicators

Our healthcare system is experiencing a crisis of quality, efficiency, and cost. IOM is acting to help correct this crisis and has encouraged providers to engage in quality-improvement initiatives through participation in public reporting and VBP programs. Multiple organizations and agencies are involved in developing such programs, each
using its own approach and criteria.

With no agreed-on convention for the constructs of these programs, multiple reimbursement methods and multiple quality-indicator measure sets exist. But there is one unifying characteristic: underrepresentation of nursing-specific indicators. Obstacles to incorporating more nursing indicators include burdensome measurement, reimbursement-system structure, and lack of evidence on the cost-effectiveness of nursing care. Future efforts should
focus on increasing the evidence so public reporting and VBP programs can incorporate more nursing-specific indicators in quality-improvement initiatives even when they’re included in the development of interprofessional measures.

Selected References

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Alliance for Health Reform. Rewarding Quality Performance: The Role of Nursing. Washington, DC: Alliance for Health Reform; 2007. www.allhealth.org/publications/Quality_of_care/Rewarding_Quality_Performance_Nursing_51.pdf. Accessed December 17, 2010.

American Nurses Association. ANA’s Principles of Pay for Quality: Guidance for Registered Nurses. Silver Spring, MD: American Nurses Association; 2010.

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Centers for Disease Control and Prevention. Essentials of public reporting of healthcare-associated infections: a tool kit. 2010. www.cdc.gov/ncidod/dhqp/pdf/ar/06_107498_Essentials_Tool_Kit.pdf. Accessed December 17. 2010.

Centers for Medicare & Medicaid Services. Fact sheet: Medicare takes new steps to help make your hospital stay safer. August 4, 2008. www.cms.gov/apps/media/press/factsheet.asp?Counter=3227&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=false&cboOrder=date. Accessed December 17, 2010. Accessed December 17, 2010.

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Centers for Medicare & Medicaid Services. Medicare adds quality measures for reporting by acute care hospitals for inpatient stays in FY2010. 2009. http://www.cms.gov/apps/media/press/factsheet.asp?Counter=3485&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date. Accessed December 17, 2010.

Centers for Medicare & Medicaid Services. State Health Official Letter #06-003. April 6, 2006. . Accessed December 17, 2010.

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U.S. Department of Health & Human Services. Executive Order is helping “change the culture” in health care to achieve better quality, value, and affordability, Secretary Leavitt reports. News release, August 23, 2007. www.hhs.gov/news/press/2007pres/08/pr20070823a.html. Accessed December 17. 2010.

U.S. Department of Health & Human Services. (2010). Hospital compare. http://www.medicare.gov/Hospital/Search/Welcome.asp?version=default&browser=Firefox|3.6|MacOSX&language=English&defaultstatus=0&MBPProviderID=&TargetPage=&ComingFromMBP=&CookiesEnabledStatus=&TID=&StateAbbr=&ZIP=&State=&pagelist=Home. Accessed December 17, 2010.

Welton J. Mandatory hospital nurse to patient staffing ratios: time to take a different approach. Online J Issues Nurs. 2007;12(3). http://www.nursingworld.org/mainmenucategories/anamarketplace/anaperiodicals/ojin/tableofcontents/volume122007/no3sept07/mandatorynursetopatientratios.aspx. Accessed December 17, 2010.

Nancy Dunton is a research professor at the University of Kansas School of Nursing and director of the National Database of Nursing Quality Indicators (NDNQI) at the University of Kansas Medical Center in Kansas City, Kansas. Danielle Gonnerman, a former research assistant with NDNQI, is currently an administrative fellow at Barnes-Jewish Hospital in St. Louis, Missouri. Isis Montalvo is director of the National Center for Nursing Quality at ANA
in Washington, D.C. Mary Jean Schumann is an independent consultant at Aspire Health Strategies in Olney, Maryland.

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