Ah, October. What is not to like? The nice brisk autumn air, pumpkins everywhere and Halloween to give us a scare (yup, I’m also a poet!!). But this October we have yet another thing to look forward to. This October, Medicare will begin to reward hospitals that provide high quality care for their patients through the new Hospital Value-Based Purchasing (VBP) Program.1 According to the Department of Health and Human Services (HHS), this program, mandated by the Patient Protection and Affordable Care Act (PPACA), “marks the beginning of an historic change in how Medicare pays health care providers and facilities–for the first time, hospitals across the country will be paid for inpatient acute care services based on care quality, not just the quantity of the services they provide”1.
Here are the basics to hospital VBP:
WHO:
This program applies to hospitals, except for the following: psychiatric hospitals, rehabilitation hospitals, children’s hospitals, long term hospitals, certain cancer treatment and research facilities, or any hospital for which there are not a minimum number of measures that apply to the hospital for the performance period or for which there are not a minimum number of cases for the measures that apply to the hospital for the performance period2.
WHY:
According to the Centers for Medicare and Medicaid Services (CMS)3:
Hospital payments account for the largest share of Medicare spending, and Medicare is the largest single payer for hospital services. In 2009, more than 7 million Medicare beneficiaries experienced more than 12.4 million inpatient hospitalizations. One in seven Medicare patients will experience some “adverse” event such as a preventable illness or injury while in the hospital. One in three Medicare beneficiaries who leave the hospital today will be back in the hospital within a month. Every year, as many as 98,000 Americans die from errors in hospital care. In addition to adding to the suffering of patients and their caregivers, these errors lead to significant unnecessary health care spending. Medicare spent an estimated $4.4 billion in 2009 to care for patients who had been harmed in the hospital, and readmissions cost Medicare another $26 billion.
Changing how Medicare pays for hospital inpatient acute care services is expected to foster higher quality care for all hospital patients1. The quality of care provided to patients could begin to have a significant impact on the bottom line, forcing some key changes in how many healthcare providers operate on a daily basis4. It is no surprise that the need for such change is desperately needed. Andrew Webber, president and CEO, National Business Coalition on Health (NBCH), reiterates this important need by stating, “Our nation’s ability to successfully compete in a global economy will suffer until we find solutions that can improve the health of all Americans and advance quality and control costs. We can, and we must, do better than ranking 37th among nations in population health status while spending twice as much money per citizen on health care services than other countries. Value-based purchasing strategies represent the path forward.” 5
HOW:
The program will incorporate the 17 Clinical Process-of-Care measures used in five health categories (acute myocardial infarction, heart failure, pneumonia, healthcare associated infections and surgical care improvement), as well as the eight measures from the hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey that reflects how patients view their care experiences6. Bryn Nelson, PhD, has done a fantastic job explaining how this will all work…be forewarned, you may need your calculators7:
For each of the 17 measures included under the Clinical Process of Care heading, CMS will use hospital data to calculate a performance score ranging from 0 to 10. A hospital earns an achievement score based on how well it did relative to a lower threshold and upper benchmark calculated from all hospitals’ previous baseline scores and an improvement score based on whether it beat its own performance during the baseline period. CMS uses the higher of these two scores for its official tally. In theory, a hospital could receive all 10 points if it beats the achievement benchmark or 0 if it fails to meet the achievement threshold or better its own previous score.
For the eight measures based on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient surveys, the scoring is roughly the same. Hospitals, however, also can earn up to 20 consistency points based on how well their single lowest score stacks up to the competition. For the fiscal year 2013 evaluation period, HCAHPS scores will count 30% toward the final score, while the Clinical Process of Care scores will be weighted 70% toward the score.
Hospitals will receive a percentage grade based on how many points they scored out of the possible total. A hospital that receives all 9s in the six measures for which it is eligible, for example, would score a 90%, the same score as a hospital that scores all 9s in the 15 measures for which it is eligible. CMS will post all scores on its Hospital Compare site (www.hospitalcompare.hhs.gov) and use the final performance score to determine the value-based incentive payment.
During each evaluation period, only hospitals with at least 10 cases for four or more applicable measures will receive a Clinical Process of Care score. Likewise, only hospitals that process at least 100 HCAHPS surveys will receive a Patient Experience of Care score. Smaller facilities that don’t meet those inclusion criteria will instead be enrolled in a demonstration project, but hospitals won’t be given special consideration based on patient demographics.
ULTIMATE GOAL:
The ultimate goal of VPB is to provide high quality of patient care with greater efficiency. In addition, experts say VBP will lead to greater transparency. Erin McCann states, “No longer will hospitals and healthcare providers be able to take refuge behind an institution’s prestigious name. As, with increasing data transparency, the most renowned names in hospitals could, in reality, yield disappointing outcomes in patient care.8” Michael L. Millenson, president of Health Quality Advisors adds, “Some of the biggest names in healthcare may or may not have the best care and that’s good for the patient to know, and that’s good for the provider to know.” If weaknesses aren’t acknowledged, there can be no improvement8.
The intent of transitioning the American healthcare system from a volume based to a quality based system seems like a step in the right direction to improving and sustaining greater quality of care, lower cost and higher patient satisfaction. However, there are critics that argue that an approach like VBP can lead to unintended consequences, such as doctors avoiding complicated medical cases in order to increase a hospital’s score7 and perhaps hospitals will become more motivated by money than by providing good care. Marc Browne, Principle at PYA, further implies, that by focusing on the details of the payment system and not the improvement of the actual delivery system, it is more difficult, if not impossible, to achieve the integration, alignment, and redesign necessary to build the improved healthcare delivery system that is so desperately needed9.
What do you think? Do you think the VPB program will improve or impede quality of care?
References for this blog post:
- http://www.healthcare.gov/news/factsheets/2011/04/valuebasedpurchasing04292011a.html
- http://www.bricker.com/services/resource-details.aspx?resourceid=488
- http://www.cms.gov/apps/media/press/factsheet.asp?Counter=3947&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date
- http://www.fiercehealthfinance.com/story/value-based-healthcare-creating-new-ideal/2010-04-07
- http://www.nbch.org/index.asp?bid=529&RequestBinary=True
- http://www.healthleadersmedia.com/page-1/HEP-261211/CMS-Releases-ValueBased-Purchasing-Incentive-Plan
- http://www.the-hospitalist.org/details/article/1056049/Value-Based_Purchasing_Raises_the_Stakes.html
- http://www.healthcareitnews.com/news/forbes-study-value-based-purchasing-elicits-favor-concern-among-healthcare-execs
- http://healthcareblog.pyapc.com/tags/value-based-purchasing/
