Ex­perts are skep­ti­cal value-based pur­chas­ing pro­gram is help­ing to boost qual­ity

Modern Healthcare - - NEWS - By Me­lanie Evans

Four years into Medi­care’s val­ue­based pur­chas­ing pro­gram, more hos­pi­tals than ever are earn­ing bonuses, and the top-per­form­ing ones are get­ting big­ger re­wards.

But pol­icy ex­perts and hos­pi­tals them­selves re­main du­bi­ous that the pro­gram has much in­flu­ence over health­care qual­ity.

Last week, the CMS pub­lished the 2016 bonuses and penal­ties for the more than 3,000 hos­pi­tals that are sub­ject to value-based pur­chas­ing, which ad­justs the amount hos­pi­tals re­ceive from Medi­care based on how they per­form on 25 mea­sures of qual­ity, pa­tient ex­pe­ri­ence and spend­ing.

The good news is that the num­ber of hos­pi­tals see­ing a pos­i­tive ad­just­ment in 2016 for their per­for­mance in­creased by about 160 hos­pi­tals to more than 1,800. And the bonuses topped out a full per­cent­age point higher than last year’s.

Value-based pur­chas­ing is one of sev­eral Af­ford­able Care Act ini­tia­tives that in­cre­men­tally change how Medi­care pays hos­pi­tals and doc­tors. Un­der th­ese ef­forts, a grow­ing per­cent­age of what providers earn from Medi­care de­pends on their per­for- mance on mea­sures of qual­ity, safety and the cost of pa­tient care.

The money at stake in each in­di­vid­ual pro­gram is mod­est—1% to 3%. But per­for­mance across all pro­grams, com­bined with in­cen­tives to adopt elec­tronic health records, will ac­count for 7% of Medi­care re­im­burse­ment this year, and will in­crease to 8% in 2016.

Few hos­pi­tals are com­ing out ahead. An Ad­vi­sory Board Co. anal­y­sis found that 85% of hos­pi­tals took a cut from Medi­care af­ter cal­cu­lat­ing the com­bined ef­fects of value-based pur­chas­ing and the re­form law’s ini­tia­tives tar­get­ing read­mis­sions and hospi­tal- ac­quired con­di­tions.

Still, the in­cen­tive to change de­pends on how much the penal­ties cost in­di­vid­ual hos­pi­tals, said Eric Fon­tana, a prac­tice man­ager for the Ad­vi­sory Board. And the amount value-based pur­chas­ing con­trib­utes to that sum isn’t much for most of them. The av­er­age bonus in 2016 was 0.59%, com­pared to an av­er­age penalty of 0.33%, an anal­y­sis by Avalere Health found.

The new­est round of re­sults fol­lows a Gov­ern­ment Ac­count­abil­ity Of­fice re­port in early Oc­to­ber that found “no ap­par­ent shift in ex­ist­ing trends” in qual­ity dur­ing the value-based pur­chas­ing pro­gram’s first three years.

Even some of the top-per­form­ing hos­pi­tals say value-based pur­chas­ing isn’t much of a fac­tor in their qual­ity im­prove­ment ef­forts.

“I don’t see it as a mo­ti­va­tor,” said Rod­ney Welch, di­rec­tor of qual­ity and ac­cred­i­ta­tion at Roth­man Or­thopaedic Spe­cialty Hospi­tal, Ben­salem, Pa. In­cen­tives fac­tored less into per­for­mance than an over­all strat­egy to im­prove qual­ity, he said. The hospi­tal ranked among the top five per­form­ers this year, earn­ing a pos­i­tive pay­ment ad­just­ment of 2.87%.

Welch said he didn’t know how much ad­di­tional rev­enue the bonus will gen­er­ate for the hospi­tal. “It is hard to quan­tify the dol­lar amount,” he said. “It is not some­thing we add up.”

That sen­ti­ment isn’t uni­ver­sal. The ex­tra cash will be a wel­come ad­di­tion to a thin mar­gin for Hawkins County Me­mo­rial Hospi­tal in Rogersville, Tenn., said Eric Deaton, chief op­er­at­ing of­fi­cer for the hospi­tal’s par­ent com­pany, Well­mont Health Sys­tem. He called the pro­gram “a pos­i­tive in­cen­tive.”

The triv­ial sums to be gained or lost

for most hos­pi­tals aren’t the only flaw in the pro­gram’s de­sign, ac­cord­ing to its crit­ics. The big­ger prob­lems, they say, are that it’s a poor mea­sure of qual­ity and puts safety net hos­pi­tals at a dis­ad­van­tage.

“It’s hard to tell any­thing in any use­ful de­tail” be­cause Medi­care does not pub­licly iden­tify which mea­sures drive a hospi­tal’s per­for­mance, said Harold Miller, CEO of the Cen­ter for Health­care Qual­ity and Pay­ment Re­form.

Many hos­pi­tals, mean­while, per­sis­tently find them­selves at the back of the pack for rea­sons be­yond their con­trol.

For ex­am­ple, pa­tients with lim­ited so­cial sup­port or financial resources may need to stay in nurs­ing homes af­ter hos­pi­tal­iza­tion.

That in­creases spend­ing per ben­e­fi­ciary, one of the mea­sures in the val­ue­based pur­chas­ing pro­gram, but Medi­care doesn’t try to ad­just for such fac­tors.

The GAO anal­y­sis con­firmed that safety net hos­pi­tals gen­er­ally do worse in the pro­gram. Those hos­pi­tals, “which pro­vide a sig­nif­i­cant amount of care to the poor, con­sis­tently had lower me­dian pay­ment ad­just­ments— that is, smaller bonuses or larger penal­ties—than hos­pi­tals over­all in the pro­gram’s first three years.”

And be­cause val­ue­based pur­chas­ing is a rev­enue-neu­tral pro­gram, low-per­form­ing hos­pi­tals are fund­ing the bonuses for their bet­ter-per­form­ing peers.

The pro­gram will award hos­pi­tals $1.5 bil­lion in 2016. That’s funded by an across-the-board 1.75% cut to the base pay­ment for Medi­care in­pa­tient care. Hos­pi­tals that per­formed the best earned back the 1.75% and more. The low­est-per­form­ing hos­pi­tals will re­cover lit­tle or noth­ing.

In the lat­est round, the hospi­tal at the very bot­tom of the heap was Re­gional Gen­eral Hospi­tal in Willis­ton, Fla., which lost the full 1.75%. A spokes­woman blamed the re­sult on the hospi­tal’s tem­po­rary in­abil­ity to re­port per­for­mance data af­ter emerg­ing from bank­ruptcy.

Bayfront Health Brooksville (Fla.), an­other hospi­tal with one of the largest penal­ties (-1.15%), said it has launched mul­ti­ple qual­ity im­prove­ment ef­forts in the past year, in­clud­ing ini­tia­tives to ad­dress com­mu­ni­ca­tion, and the use of catheters and cen­tral lines.

“Physi­cians on our med­i­cal staff, our nurses and other clin­i­cians con­tin­u­ally re­view ways to strengthen our care by im­ple­ment­ing ev­i­dence-based prac­tices,” said Jen­nifer Siem, a spokes­woman for Bayfront Health Brooksville.

“While hos­pi­tals across the coun­try are ded­i­cated to th­ese qual­ity and ex­pe­ri­ence met­rics, just one in­ci­dent can have a sig­nif­i­cant im­pact on th­ese rates in the form of penal­ties,” she said.

Be­cause value-based pur­chas­ing is a rev­enue-neu­tral pro­gram, the low-per­form­ing hos­pi­tals are fund­ing the bonuses for their bet­ter-per­form­ing peers.

While some call the qual­ity bonuses too puny, an ex­ec­u­tive at Hawkins County Me­mo­rial Hospi­tal said they were “a pos­i­tive in­cen­tive.”

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