One of the sweeping changes to the U.S. healthcare system in the Patient Protection and Affordable Care Act is the Hospital Value-Based Purchasing Program. In October, Medicare will launch the program, with the goal of compensating hospitals and other providers according to the quality of care they deliver rather than the number of medical services they provide.
Healthcare facilities and other providers will be compensated based on their ability to meet a set of core quality metrics.
While the program is a step in the direction away from the traditional U.S. healthcare model of fee-for-service, uncertainty remains as to how value-based purchasing will affect hospitals and practices as well as patients.
Dorland Health sits down with Joanna Bokovoy, DrPH, RN, to help shed light on the topic of value-based purchasing. Bokovoy is the assistant vice president for healthcare improvement and research at Adventist Health, a faith-based, nonprofit healthcare delivery system serving communities in California, Hawaii, Oregon and Washington.
Dorland Health: How will value-based purchasing affect a hospital or health system’s bottom line as well as patient health outcomes?
Joni Bokovoy: How it affects both a hospital’s bottom line and patient health outcomes is not yet completely clear. Of course, the expectation is that it will drive higher quality healthcare, but that remains to be seen. As defined, value-based purchasing (VBP), a program authorized by the Patient Protection and Accountable Care Act of 2010, gives the Centers for Medicare & Medicaid Services the power to base a portion of hospital reimbursement payments on how well hospitals perform in 25 core measures. The move is intended to help CMS move from being a passive bystander to an active buyer of what its officials have deemed higher-quality healthcare. Value-based purchasing marks the beginning of an era of accountability and true pay-for-performance at the hospital level. Value-based purchasing is not a collaboration but a competition in which every hospital is pitted against the entire market, according to Dr. Trent Haywood, the former deputy chief medical officer at CMS. It’s also a zero-sum game. That means there will be winners and losers, with the entire cost-neutral program funded by extracting money from the worst performers to financially reward the best. In this competition-type model, you need to know who you can beat, Haywood says.
DH: What is the link between care coordination and value-based purchasing?
Joni Bokovoy: Well-coordinated care across different providers and settings can both directly and indirectly improve Clinical Process of Care Domains and the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS survey). Studies have shown how care coordination can improve quality outcomes. However, in January 2012, the Congressional Budget Office found that six disease management and care coordination demonstration projects and four value-based payment demos did not curb Medicare costs as expected. In fact, only one of the four value-based payment demonstration projects resulted in a cost savings – 10 percent, to be exact. This was for bundled payments covering all services related to heart bypass surgeries. So, we still have work to do.
DH: How is Adventist taking advantage of value-based purchasing?
Joni Bokovoy: Nine Adventist hospitals participated in the CMS Hospital Quality Incentive Demonstration (HQID) project, with eight earning financial incentives. CMS has proposed 25 measures for the fiscal year 2013 value-based purchasing program, and Adventist Health has a stretch goal of reaching top decile for all core measures. Many of our hospitals have already achieved that, but we are aware it is a moving target. We have implemented evidence-based order sets for all clinical measures and are using Cerner’s NHIQM quality tool for real time tracking of compliance. For the patient and family satisfaction measures, we have a dynamic patient experience group, which includes patient and family members, that regularly evaluates our HCAHPS scores – including more recent ones from an internal satisfaction vendor – and takes action to improve the patient experience. Our goal is “patient first,” assuring that patients are safe and well cared for at all times. We are currently developing a model of care that puts the patient first gives a framework which sets high standards for safe, appropriate and highly reliable care by mission-driven, competent, compassionate caregivers.
DH: Are there any disadvantages or downsides of value-based purchasing?
Joni Bokovoy: The VPB program was based on many assumptions that were not yet tested before they were rolled out. The targets are moving targets, and will be tied to results that have already happened in the past. Also, the measures [CMS] chose are not the only measures, nor necessarily the best, that define quality. Our organization has made it a goal to use technology, evidence, and well-trained, accountable employees to help us be successful in the context of VBP, but continue to focus on other ways to drive value in our system.