Medicare Beneficiaries’ Perspectives on the Quality of Hospital Care and Their Implications for Value-Based Payment

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Medicare's Hospital Value-Based Purchasing (HVBP) program adjusts hospital payments according to performance on 4 equally weighted quality domains: clinical outcomes, safety, patient experience, and efficiency. The assumption that performance on each domain is equally important may not reflect the preferences of Medicare beneficiaries. To estimate the relative importance (ie, weight) of the 4 quality domains in the HVBP program from the perspective of Medicare beneficiaries and the impact of using beneficiary value weights on incentive payments for hospitals enrolled in fiscal year 2019. An online survey was conducted in March 2022. A nationally representative sample of Medicare beneficiaries was recruited through Ipsos KnowledgePanel. Value weights were estimated using a discrete choice experiment that asked respondents to choose between 2 hospitals and indicate which they preferred. Hospitals were described using 6 attributes, including (1) clinical outcomes, (2) patient experience, (3) safety, (4) Medicare spending per patient, (5) distance, and (6) out-of-pocket cost. Data analysis was performed from April to November 2022. An effects-coded mixed logit regression model was used to estimate the relative importance of quality domains. HVBP program performance was linked to Medicare payment data in the Medicare Inpatient Hospitals by Provider and Service data set and hospital characteristics from the American Hospital Association Annual Survey data set, and the estimated impact of using beneficiary value weights on hospital payments was estimated. A total of 1025 Medicare beneficiaries (518 women [51%]; 879 individuals [86%] aged ≥65 years; 717 White individuals [70%]) responded to the survey. A hospital's performance on clinical outcomes was most highly valued by beneficiaries (49%), followed by safety (22%), patient experience (21%), and efficiency (8%). Nearly twice as many hospitals would see a payment reduction when using beneficiary value weights than would see an increase (1830 vs 922 hospitals); however, the average net decrease was smaller (mean [SD], -$46 978 [$71 211]; median [IQR], -$24 628 [-$53 507 to -$9562]) than the comparable increase (mean [SD], $93 243 [$190 654]; median [IQR], $35 358 [$9906 to $97 348]). Hospitals seeing a net reduction with beneficiary value weights were more likely to be smaller, lower volume, nonteaching, and non-safety-net hospitals located in more deprived areas that served less complex patients. This survey study of Medicare beneficiaries found that current HVBP program value weights do not reflect beneficiary preferences, suggesting that the use of beneficiary value weights may exacerbate disparities by rewarding larger, high-volume hospitals.