Value-based purchasing and hospital acquired conditions: Are we seeing improvement?
Introduction
It is reported that the United States currently spends approximately 17.9% of the national GDP on health services with projected increases of up to 19.6% by 2021 [1]. This level of spending has spurred a reevaluation of the way in which our system operates, particularly when continually rising health care costs are paired with poor or inadequate outcomes. The U.S., compared to other developed countries, ranks poorly on several key quality outcome measures such as infant mortality and childhood obesity. In addition, the U.S. received a poor overall score on 2011s National Scorecard on U.S. Health System Performance [2]. The question and issue at hand is: how can the U.S. achieve better quality outcomes while also reducing health care cost and expenditures?
Process management techniques including Total Quality Management (TQM), Six Sigma, and a variety of additional flavors of process evaluation and enhancement procedures were believed to be hospitals’ answer to poor clinical outcomes and high costs. Through better processes, health systems have attempted to improve outcomes. However, despite these efforts hospitals are still responsible for poor quality indicators such as iatrogenic infections, poor work processes, long wait times, and a host of other issues [2], [3].
Finding a solution to our cost and outcome issues as well as creating a health system that provides safe, quality care which all can access has become a focal point for patients, policy makers, and healthcare providers. Safety, quality and access, while historically maintaining some level of concern to those seeking and providing care, have gained attention primarily due to cost and reports of patients being harmed during the care process. The Institute of Medicine's (IOM) To Err is Human: Building a Safer Health System [4] and Crossing the Quality Chasm [5] highlight areas where health care is lacking. These reports spearheaded a renewed focus on safe, quality care, ultimately contributing to the passage of the Patient Protection and Affordable Care Act of 2010.
One currently proposed solution involves incentivizing organizations to pursue value through either the ability to acquire higher reimbursements or the threat of losing current reimbursement if a certain quality and cost level is not met. As part of the Patient Protection and Affordable Care Act of 2010, the Hospital Inpatient Value-Based Purchasing Program (VBP) was signed into law [6]. VBP is an incentive arrangement through The Centers for Medicaid and Medicare Services (CMS), in which hospitals and other providers, are rewarded for adhering to quality standards or providing value in the delivery of services. This approach to achieving better performance relies on behavior modification through motivation for higher pay [7].
Section snippets
Background
Several studies have demonstrated that incentives such as Pay for Performance (P4P) do indeed have a positive effect in hospitals’ adherence to improving quality and safety [8], [9], [10], [11], [12]. For instance, in 2003, CMS initiated a three-year P4P initiative to determine its effectiveness in hospitals. This study evaluated the effect that P4P had on mortality rates for hip and knee replacement, pneumonia, heart bypass, heart failure, and heart attack. Specifically, it tracked a set of
Data sources
The 2012–2013 American Hospital Association (AHA) database, the 2012–2013 Hospital Acquired Conditions Database, the Financial Year 2013 Final Rule Standardizing File, and the 2013 Hospital Value-Based Purchasing (HVBP) Total Performance Scores Database through CMS will be utilized to conduct this analysis. The AHA database includes information on hospital characteristics, demographics, services, and expenses from over 6000 hospitals in the US [24]. The HAC database focuses on eight
Results
The final sample included 2927 hospitals with complete observations for all the study variables. Table 3 provides descriptive statistics for all the independent variables. For the hospitals in this analysis, the mean total performance score was 55.39. 19% were Medicaid patients and 51% were Medicare patients, and the average case mix index was a 1.51. Regarding organization control, 14% were government (non-federal) owned hospitals, 64% were not-for-profit hospitals, and 22% were for-profit
Discussion
The aim of hospital value-based purchasing is to improve the quality of care that patients receive by utilizing financial payment incentives. This study however, did not find strong evidence that the TPS used for the financial payment incentives from CMS was significantly correlated to patients’ quality of care as measured by HACs. In addition, while CMS adopts VBP strategies in an effort to lower its expenses in the long term, it is critical to recognize that they may also increase costs or be
Limitations and future research
While this research does include a robust set of data allowing for generalizability, it does not have specific enough data to control for all issues which may affect the TPS's correlation with the quality outcomes measured in this study. For instance, specific patient variables such as age, gender, ethnicity, and deprivation could influence the TPS and ultimately influence the inferences in this study. Furthermore, the manner by which the data used in this study is reported could provide a
Conclusion
P4P and VBP do stand as a possible step forward in the need for greater value in the American health care delivery system. The research presented in this study indicates that the current VBP system does not correlate with HACs well. Measurement and quality indicators do need more research, as does the implications of P4P and VBP on rural, safety net, and other similarly sized and resourced facilities. What is also necessary is a better understanding of how the future of VBP which will include
Conflicts of interest
No conflicts of interests declared.
Source of funding
None declared.
Acknowledgments
This research was supported in part by a grant from the University of North Florida's Brooks College of Health Research Program (grant no. 230318) and funded in part by Brooks Health Foundation (grant no. 1312-002).
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