MBAX 6332 Week 9 Two-Proposal Analytic Memo Example

Memorandum

To: Policy Committee, composite State Hospital Association

From: Policy Analyst

Date: October 9, 2026

Re: Comparing two proposals to improve the Hospital-Acquired Condition Reduction Program

The Weakness Both Proposals Target

Two weaknesses in the Hospital-Acquired Condition Reduction Program have drawn the most criticism. Its fixed-quartile design penalizes a quarter of hospitals every year regardless of how much all hospitals improve, and its infection measures count what hospitals find without regard to how hard they look. Both make the penalty a weak signal of whether a hospital is safe. Sankaran et al. (2019) found no measurable gain at hospitals after they were penalized, consistent with hospitals not knowing what to change. This memo compares two proposals aimed at those weaknesses and tests each against the reactions it would provoke among hospitals, clinicians and regulators.

Proposal A: Replace the Quartile With Fixed Performance Thresholds

Under this proposal, hospitals would be penalized only if their scores fell below a fixed standard, with credit for improvement, as in some other Medicare quality programs. Every hospital could avoid the penalty by reaching the standard. The case for it is strong: relative rankings give low performers little reason to expect reward from improvement, and An earlier Medicare demonstration that rewarded hospitals by rank failed to accelerate gains among the weakest performers (Ryan et al., 2012). The obstacle is that the quartile is written into the statute, 42 U.S.C. § 1395ww(p), so only Congress can change it.

Proposal B: Report Testing Intensity Beside Infection Measures

Under this proposal, the agency would publish each hospital's culture and C. difficile testing rates alongside its infection measures and study whether infection scores should be adjusted for testing. It does not require new law. Its aim is to separate hospitals that are safe from hospitals that simply test less, a distinction Haut and Pronovost (2011) argued outcome measures blur.

Reactions Each Would Provoke

Merton (1936) warned that purposive action often produces unanticipated consequences, and Campbell (1979) observed that an indicator relied on for important decisions tends to be gamed, and that the gaming then distorts the work being measured. Both warnings apply.

Proposal A would likely provoke a reaction around where the threshold is set. If it were set low, most hospitals would pass and the program would lose force; if set high, it would penalize as many hospitals as the quartile does. Hospitals near the threshold would face strong pressure in the year their score hovers there, which could intensify the testing pressure described below rather than reduce it. Political reactions would also matter: Congress would need to act, and hospital associations, which generally favor fixed thresholds, would face pressure from payers who prefer guaranteed savings.

Proposal B would provoke a different reaction. Once testing intensity is published, it becomes an indicator in its own right, and Campbell's warning suggests hospitals might raise testing to look vigilant, including unnecessary cultures that stewardship programs work to prevent. That risk can be reduced by publishing testing rates only as context, flagging hospitals with both low infection counts and very low testing, rather than scoring testing itself.

Comparison

Table 1

The Two Proposals Compared

Compiled for this memo.

Recommendation

Pursue Proposal B now, in the association's comments on the next inpatient payment rule, with testing rates published as context rather than scored. Support Proposal A as a longer-term legislative goal. The two address different weaknesses, so they are complements, not rivals.

References

Campbell, D. T. (1979). Assessing the impact of planned social change. Evaluation and Program Planning, 2(1), 67-90. https://doi.org/10.1016/0149-7189(79)90048-X

Haut, E. R., & Pronovost, P. J. (2011). Surveillance bias in outcomes reporting. JAMA, 305(23), 2462-2463. https://doi.org/10.1001/jama.2011.822

Hospital-acquired conditions, 42 U.S.C. § 1395ww(p) (2024).

Merton, R. K. (1936). The unanticipated consequences of purposive social action. American Sociological Review, 1(6), 894-904. https://doi.org/10.2307/2084615

Ryan, A. M., Blustein, J., & Casalino, L. P. (2012). Medicare's flagship test of pay-for-performance did not spur more rapid quality improvement among low-performing hospitals. Health Affairs, 31(4), 797-805. https://doi.org/10.1377/hlthaff.2011.0626

Sankaran, R., Sukul, D., Nuliyalu, U., Gulseren, B., Engler, T. A., Arntson, E., Zlotnick, H., Dimick, J. B., & Ryan, A. M. (2019). Changes in hospital safety following penalties in the US Hospital Acquired Condition Reduction Program: Retrospective cohort study. BMJ, 366, l4109. https://doi.org/10.1136/bmj.l4109