Value-Based Purchasing?
Executive Summary
Introduction
Three pay-for-performance (P4P) programs that apply risk to payments in the acute-care settings are slated for launch in 2015. These programs are associated with hospital-acquired conditions, readmissions, and VBP. VBP is the only project that has the potential of creating an incentive for good outcomes. According to the Centers for Medicare & Medicaid Services (CMS), hospital VBP is an effort to link Medicare’s payment system to the quality of care provided to inpatients. Value in healthcare is measured in terms of patient outcomes achieved per dollar expended. While the healthcare industry has seen quality measures become more prevalent, cost associated with the outcomes has received far less attention. The question remains whether the hospital VBP program will have an impact on quality of care or hospital payments.
The hospital VBP program involves a total performance score for hospitals. The total performance score is based on the following four domains: clinical process of care (weight of 20 percent), patient experience of care (weight of 30 percent), outcomes (weight of 30 percent), and efficiency – via the Medicare spending per beneficiary measure (weight of 20 percent).
The clinical process of care score is associated with the following 12 clinical process measures related to five conditions:
• Acute myocardial infarction (AMI or heart attack)
o AMI-7a: Heart attack patients given fibrinolytic medication within 30 minutes of arrival
o AMI-8a: Heart attack patients given PCI within 90 minutes of arrival • Heart failure (HF)
o HF-1: Heart failure patients given discharge instructions • Pneumonia (PN)
o PN-3b: Pneumonia patients whose initial emergency room blood culture was performed prior to the administration of the first hospital dose of antibiotics o PN-6: Pneumonia patients given the most appropriate initial antibiotic(s) • Surgical care improvement project (SCIP)
o SCIP-Card-2: Surgery patients who were taking heart drugs called “beta blockers” before coming to the hospital, who were kept on the beta blockers during the period
• Healthcare-associated infections (HAIs)
o SCIP–Inf–1: Surgery patients who are given an antibiotic at the right time (within one hour before surgery) to help prevent infection
o SCIP–Inf–2: Surgery patients who are given the right kind of antibiotic to help prevent infection
o SCIP–Inf–3: Surgery patients whose preventive antibiotics are stopped at the right time (within 24 hours after surgery)
o SCIP–Inf–4: Heart surgery patients whose blood sugar (blood glucose) is kept under good control in the days right after surgery
o SCIP–Inf–9: Surgery patients whose urinary catheters were removed on the first or second day after surgery
The clinical process of care score is based on the relative improvements in a hospital’s demonstrated clinical process measures when compared to the measures recorded at a baseline reporting period.
The patient experience of care score is calculated as the sum of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) base score and consistency score. HCAHPS is a national, standardized survey that asks adult patients about their experiences during a recent hospital stay. The patient experience of care score has a range from 0-100 and indicates how well a hospital is doing on eight dimensions of the HCAHPS survey, including:
• Nurse communication • Doctor communication • Cleanliness and quietness • Responsiveness of hospital staff • Pain management
• Communication about medications • Discharge information
• Overall rating
The outcome domain measure assesses a broad set of healthcare activities that affect a patient’s well-being, including:
• Acute myocardial infarction (AMI) 30-day mortality rate
• Heart failure (HF) 30-day mortality rate o Heart failure (HF) 30-day mortality rate • Pneumonia (PN) 30-day mortality rate
o The death (mortality) rate shows whether a patient with a PN diagnosis died within 30 days of their hospitalization.
• Central line-associated bloodstream infection (CLABSI)
o The CLABSI measure compares the actual number of CLABSIs with the predicted number of infections based on the baseline U.S. experience.
• AHRQ (PSI-90) patient safety for selected indicators (composite)
o The AHRQ PSI-90 is a composite of eight underlying component indicators. Lower ratios indicate
Finally, the efficiency measure assesses the cost of care by measuring Medicare spending per beneficiary (MSPB-1). This measure of efficiency is based on an assessment of payment for services provided to a beneficiary during a spending-per-beneficiary episode that spans from three days prior to an inpatient hospital admission through 30 days after discharge. The payments included in this measure are standardized and adjusted so that variation in geographic costs is removed, as well as variation in patient health status.
Evaluating Data
Data was acquired from the Hospital Compare data repository in February 2015. Hospital Compare has information about the quality of care at over 4,000 Medicare-certified hospitals across the United States. Hospital Compare can be used to compare data regarding the quality of care across different hospitals.
Hospital Compare was created through the efforts of the Centers for Medicare & Medicaid Services (CMS), in collaboration with organizations representing consumers, hospitals, doctors, employers, accrediting organizations, and other federal agencies.
The Hospital Compare data that was used in the following analysis was based on Hospital VBP performance data from the January 1, 2013 - December 31, 2013 reporting period.
Results of the Evaluation: Total Performance Score by Hospital Ownership
When comparing the total performance scores through the lens of hospital ownership status, those hospitals that are physician-owned had the highest total performance score. The lowest total performance score occurred in the state government-owned hospitals (Figure 1).
The observed differences may be partly related to the perceptions of patients regarding hospital quality. Jordan Rau (2013) identified that there is mixed reception of patient surveys, with some complaining that patients’ views can be swayed by the type of hospital; hospitals treating the very sickest patients often receive worse evaluations, and physician-owned hospitals with just a few specialties have tended for fare better. Therefore, the lower total performance score in some hospital types may be in part due to lower patient satisfaction. In addition, patient experience in Safety-net Hospitals (Chatterjee, et. al., 2012) (SNHs) had an overall lower performance than that of non-safety net hospitals on patient experience metrics. SNHs care for vulnerable and poor populations. However, if a hospital demonstrates improvements, they may lose money under the VBP program if the improvements are not as great as compared to other hospitals (Rau, 2013).
When comparing the total performance score of each state, Hawaii, South Dakota, Alaska, and Minnesota have the highest while Washington, D.C., Nevada, New Jersey, and Connecticut have the lowest scores (Figure 2).
Figure 4. Average AMI readmission rates by state:
Figure 5. Association between AMI readmission rates and total performance score for each state:
However, there was a moderately strong positive association between MSPB and the AMI readmission rate (Figure 7). That is, those hospitals with a higher AMI readmission rate tend to have higher MSPB.
Lastly, when comparing AMI readmission rates to the patient experience of care scores, a moderately strong negative association exists (Figure 8). That is, as AMI readmission rates increase, the patient experience of care score decreases.
Conclusions
In the VBP study and in hospital-acquired conditions, are we seeing improvement? VBP does not appear to strongly correlate with improved quality and patient safety as indicated by Hospital Acquired Condition (HAC) scores. Here the authors identify that either the total performance score does not measure what it should, or the quality outcome measurements do not reflect the quality of the total performance scores measure. That is, there are questions as to how the total performance score equates to quality of care.
Tsai et. al. (2015) found that hospitals that performed major surgical procedures and had high patient satisfaction tended to provide more efficient care and were associated with higher surgical quality.
According to (Kaplan & Porter, 2011) one way to properly manage value measures for both outcomes and cost is to view care as a coordinated and multi-dimensional service versus fragmented and independent units while treating a patient’s condition. Fiscal penalties for 2015 will be related to a combination of readmissions, hospital-acquired conditions, and value-based purchasing rates. According to (Rice, 2014) Escalating penalties are drawing fire from teaching hospitals, which are “disproportionately represented among the worst-performing hospitals.” This leaves us to question if the process of care and outcome measures are creating adverse comparisons. Conversely, many hospitals are improving their performance and shifting from volume to value. However, according to Werner and Dudley (2012), almost two-thirds of hospitals will only experience a fraction of 1 percent of the redistribution of resources. With such small results, the challenge of designing effective quality measures is highlighted. The balance is implementing measures that focus on outcomes and align cost and quality for appropriate comparison and accountability.
References
Chatterjee, Paula, Joynt, Karen, Orav, E., and Ashish Jha (2012). Patient Experience in Safety-Net Hospitals: Implications for Improving Care and Value-based Purchasing. Arch Intern Med 172(16): 1204-1210. Doi: 10.1001/archinternmed.2012.3158
Kaplan, Robert and Porter, Michael (2011). The Bid Idea: How to Solve the Cost Crisis in Health Care. Harvard Business Review. Retrieved: https://hbr.org/2011/09/how-to-solve-the-cost-crisis-in-health-care
Rice, Sabriya (2014). Medicare penalties begin taking toll. Modern Healthcare. Retrieved:http:// www.modernhealthcare.com/article/20141231/NEWS/312319977/medicare-penalties-begin-taking-toll
Rau, Jordan (2013). Nearly 1,500 Hospitals Penalized Under Medicare Program Rating Quality. Haiser Health News. Retrieved: http://kaiserhealthnews.org/news/value-based-purchasing-medicare/
Tsai, Thomas, Orav, John, and Ashish Jha (2015). Patient Satisfaction and Quality of Surgical Care in US Hospitals. Annals of Surgery. Retrieved: http://journals.lww.com/annalsofsurgery/ Abstract/2015/01000/Patient_Satisfaction_and_Quality_of_Surgical_Care.2.aspx
About the Authors
Brooke Palkie, EdD, RHIA College of St. Scholastica
Brooke Palkie is an Associate Professor in the Health Informatics and Information Management Department at The College of St. Scholastica. Brooke earned her doctoral degree in educational leadership and management and holds the credential of Registered Health Information Administrator.
David Marc, MBA, CHDA College of St. Scholastica
About Panacea Healthcare Solutions, Inc.
Panacea Healthcare Solutions provides coding, compliance, reimbursement and revenue solutions through consulting, software, publications and webcasts. Panacea operates RACmonitor, ICD10monitor and now VBPmonitor, an online news and information service that monitors the transition of healthcare providers from the current Fee For Services (FFS) payment system to the value-based purchasing model authorized by Congress in Section 3001(a) of the Patient Protection and Affordable Care Act. The program uses the hospital quality data-reporting infrastructure developed for the Hospital Inpatient Quality Reporting (IQR) Program, which was authorized by Section 501(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. VBPmonitor.com is not affiliated with any governmental agency but is a reliable source for healthcare providers in all settings.
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