Federal Government Now Paying Hospitals to Make Patients Happy


They say happiness can't be bought. But that's not going to stop Medicare's payment technocrats from trying! The Wall Street Journal reports that the seniors' health program is tying a billion dollars worth of payments to making patients happy: 

At Grady Memorial Hospital here, doctors are being taught to stop interrupting patients while they are speaking. Nurses recently got hand-held phones so patients can reach them instantly. New bedside comforts include cable sports channel ESPN and a menu featuring wild salmon.

Grady is making these changes in response to a shift in how the federal government pays hospitals for treating people on Medicare, the federal health-care program for seniors.

Nearly $1 billion in payments to hospitals over the next year will be based in part on patient satisfaction, determined by a 27-question government survey administered to patients. Hospitals with high scores will get a bonus payment. Those with low ones will lose money.

It's nice that Medicare's overseers are concerned with patient satisfaction, which is not trivial. But these sorts of fiddly payment schemes almost always end up raising more questions than they answer. Should we be paying for patient satisfaction? For doctor credentials? For efficiency? For health outcomes? And if so, what criteria should we use to measure the relative success of any hospital or provider organization at meeting these goals? Furthermore, how much should we actually pay for any of these things? How much is it worth to doctors? To medical administrators? To patients? The answer to most of these questions is: Who knows?

It's hard enough for local providers to determine market-clearing prices that balance services and costs in sustainable proportions. It's impossible for a centralized board of payment decision makers overseeing a vast federal bureacuracy to know. Organizing this sort of information about the overlapping interests of buyers and sellers in complex service environment is what markets are extremely good at. And for that you need price signals, not price and payment controls. But rather than figure out ways to allow markets to help balance these interests, the federal government has instead spent the last four decades experimenting with various payment tweaks like this one, most of which have failed

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  1. The answer to most of these questions is: Who knows?

    And the answer to THAT question is, “Why, your Federal Overlords, of course!”


  2. If you’re at Grady Hospital you have Medicare and/or a bullet wound.

    1. I meant Medicaid. The bullet wound part holds true.

  3. Nurses recently got hand-held phones

    Nice to see the hospital getting into the 19th century, those smoke signals were sooo inconvenient.

    1. Maybe that’s new at Grady Memorial, but we’ve been carrying phones at my hospital for years.

      Of course the phones bring up another problem. Whenever I’m in with a patient, the phone rings constantly. So what do I do? Pay attention to my patient whose room I’m in, and ignore my patient calling the phone? Interrupt the care of my patient I’m currently in the room with so I can answer the call from my other patient? Either way we get bad marks on the satisfaction survey call.

  4. Nearly $1 billion in payments to hospitals over the next year will be based in part on patient satisfaction, determined by a 27-question government survey administered to patients.

    Actually, those payments are controlled entirely by one and only one of those questions:

    Using any number from 0 to 10, where 0 is the worst hospital possible and 10 is the best hospital possible, what number would you use to rate this hospital during your stay?

    Just for lulz, here’s the 586 page (yes, that’s five hundred and eighty-six pages) manual for this survey: Quality Assurance Guidelines V7.0 March 2012.pdf

    1. I thought we agreed we wouldn’t talk shop, RC.

      1. We agreed you wouldn’t talk shop, Paulperiod.

        Mostly, I just wanted people to revel in the wonders of a 586 page manual to administer a 27 question test.

        1. Where one question matters.

        2. RC, are you attempting to compete with Balko, here, in the ball-shot area? I already pray almost daily for Washington DC to get completely wiped off the map but you just had to go and give me yet another reason?!

    2. Correct, and the scores equate to:
      10 = satisfactory
      0-9 = unsatisfactory

      A hospital that gets 9’s across the board is treated the same as a hospital that gets 1’s.

  5. This is legal under the Pursuit of Happiness clause of the Declaration of Independence. And it’s a tax.

  6. This survey is such a pain in the ass. Every staff meeting now is primarily to stress that we are supposed to arrange our care now, not for best patient outcomes, but to get the best customer satisfaction scores.

  7. The answer to the question is, of course, “the patient,” who should decide what each particular “benefit” or “good” is worth to him or her. But of course, since the one posing the question is the politically-created collective entity that is ACTUALLY paying the providers directly, I expect that the patient will ultimately end up with little or no say.

    What health care reform should be about: putting the patient and his or her hired health care provider in charge.

    What health care reform is ACTUALLY about: who should be in charge of spending other people’s money, and determining other people’s level and quality of care, so that the boat in which the politicians and moneyed healthcare provider institutions ride is rocked the least.

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