AHRQ Health Care Innovations Exchange Profiles NJHA/AMS Medicare Gainsharing Pilot Demonstration

The July 16, 2014 issue of the Agency for Healthcare Research and Quality (AHRQ) Health Care Innovation Exchange (http://innovations.ahrq.gov/profiles/hospital-gain-sharing-program-offers-incentives-physicians-based-their-efficiency-producing) reviews the results of the 3-year NJHA/AMS Medicare  Gainsharing Pilot Demonstration.  The report, Hospital Gain-Sharing Program Offers Incentives to Physicians Based on Their Efficiency, Producing Significant Cost Savings Without Decline in Quality, notes that the program reduced costs over 3 years by roughly 8.5% per admission, with total savings for the 12 participating NJ hospitals reaching nearly $113 million.  Performance on various quality measures either remained the same or improved throughout the program.

The project, officially called the New Jersey Care Integration Consortium, but informally known as “Gainsharing,” was facilitated by the New Jersey Hospital Association (NJHA) in partnership with Applied Medical Software Inc. (AMS).  It was first launched in 2009 as a three-year pilot project. Based on its success, NJHA/AMS secured federal approval for a second, larger demonstration program (known as “Model 1”) under the Affordable Care Act’s Bundled Payments for Care Improvement (BPCI) initiative. That project is ongoing.

Applied Medical Software (AMS) and the New Jersey Hospital Association are credited as the developing organizations of the gainsharing approach.   Gainsharing is now allowed in all CMS BPCI initiatives, as well as in Accountable Care Organizations (ACOs) or other Shared Savings Programs (SSP).  The role of facilitator established in this initial demonstration is also recognized in all in all of the BPCI initiatives.

AHRQ noted that AMS implemented gainsharing with other organizations, including the Greater New York Hospital Association and Continuum Health Partners.  The article details (1) a description of the incentive payment structures and key elements of the program, (2) the results, (3) the planning and development process, (4) resources and funding, and (5) considerations for getting started.

All of us at AMS are very pleased with the results as reported by AHRQ.   Our commitment to gainsharing and working with our hospital association partners extends back 15 years.  The results are similar in all of our programs – align the incentives between the hospital and the physicians and the hospital will lower costs while maintaining or improving quality of care.  Gainsharing is proving to be an effective tool to engage physicians.

To read the full AHRQ profile go to:  http://innovations.ahrq.gov/profiles/hospital-gain-sharing-program-offers-incentives-physicians-based-their-efficiency-producing.