Value-Based Purchasing Program Research Articles

Hospital Medicare Spending per Beneficiary: A Longitudinal Study

SUMMARY Goal While studies have examined quality and health outcomes related to the Centers for Medicare & Medicaid Services’ (CMS’s) Hospital Value-Based Purchasing (HVBP) Program, a significant gap exists in the literature regarding the relationship between pay-for-performance initiatives and hospital financial performance in the program’s Efficiency and Cost Reduction domain. This study examined the association between hospitals’ cost inefficiency and participation in the HVBP Program by estimating the probability and magnitude of improvement or achievement in the program’s Efficiency and Cost Reduction domain. Methods The 2014–2019 Efficiency and Cost Reduction domain data were obtained from CMS and merged with the American Hospital Association’s Annual Survey Database. We conducted a zero-inflated negative binomial regression to account for the excessive number of zeros in the data. Principal Findings The negative binomial component of the model assessed the magnitude of the impact on the Efficiency and Cost Reduction improvement from each covariate, while the zero-inflated component assessed the odds of being in the “certain-zero” group, meaning no chance to improve or achieve. Hospital ownership, location, size, safety-net status, percentage of Medicare patients, and the number of registered nurses per bed were statistically significant. Additionally, the Herfindahl-Hirschman Index and teaching status significantly influenced efficiency performance. Practical Applications Changes in hospital performance in this domain exist and have evolved. Hospitals might be at a disadvantage with this performance measure because of their inherent organizational structure. The HVBP Program may not provide clear enough direction or actionable incentive to address the needs of stakeholders influenced primarily by measures of Medicare spending per beneficiary. This study’s findings hold practical value for policymakers, healthcare administrators, and researchers. Policymakers can use this information to tailor future pay-for-performance programs and effectively allocate resources. Healthcare administrators can identify areas for improvement and benchmark their performance against similar institutions. Researchers can explore the program’s long-term sustainability and investigate cost drivers within different hospital groups. By understanding the link between hospital characteristics and cost reduction, all stakeholders can contribute to a more efficient healthcare system.

Blood Culture Contamination Mitigation: Sustaining Success and Stewardship Systemwide

Background: False-positive blood cultures compromise care; extended stays, Clostridioides difficile risk increases and renal woes tagged to antibiotic alms contribute to the doubling of patient in-hospital mortality that is observed relative to true negative diagnostic results. False-positive affiliated central line-associated bloodstream infection reports can further obfuscate the quality of care provided. Between personnel performance pressures, laboratory resource losses and the risk for financial penalty under Value-Based Purchasing and Hospital-Acquired Condition Reduction Programs (Centers for Medicare & Medicaid Services), it becomes difficult to brush aside the burden of a non-zero blood culture contamination rate. Following unsuccessful and unsustainable endeavors that included educational exercise and waste tube employment, initial-specimen diversion devices designed to shift performance burdens from technicians to technology were co-opted in an effort to secure reliable blood culture contamination rate reductions. Methods: A 3.6% blood culture contamination rate was observed systemwide prior to intervention, which began in 2020. Among seventeen facilities that share a data system, twelve co-opted initial-specimen diversion device technology as the evidence-based anchor to a trifurcate intervention strategy that included value analysis and cultural curation. Results: The 2023 systemwide blood culture contamination rate was 1.95%; down from 2.8% in 2022 and 3.2% in 2021. The average cost per false-positive event was $2,111, with intervention amounting to systemwide savings of $4.1 million in 2023 as approximately 1,920 patients avoided false-positive incidents. Critical to year-over-year systemwide uptick in adoption of interventive technology was consistent and near real-time communication to caretakers regarding outcomes. Conclusion: The sustained success of the multifactorial solution showcased herein stems from the coupling of an evidence-based action with an ongoing assessment of value and communication channels carefully constructed to celebrate and perpetuate value observed. Layered uncertainties often cloud the crux of a multifactorial solution to a complex conundrum; for many decades the literature-supported solution to high blood culture contamination rates was to educate every person involved in every possible way. Only recently, following recommended practice revisions endorsed by the Clinical and Laboratory Standards Institute and Centers for Disease Control and Prevention, did it become apparent nationwide that education alone was insufficient; some contaminant pathways persist without meticulously mechanical closure. Antimicrobial stewardship requires the respectful removal of adaptable pressures from microorganisms, but the inverse is equally important; by setting an ambitious systemwide blood culture contamination rate target of 1% or less, it is hoped that all facilities involved herein respond to this pressure with optimism, introspection and innovation.

When Agency Fails: An Analysis of the Association Between Hospital Agency Staffing and Quality Outcomes.

Staffing is critical to hospital quality, but recent years have seen hospitals grappling with severe shortages, forcing them to rely on contract or agency staff for urgent patient care needs. This shift in staffing mix has raised questions about its impact on quality. Consequently, this study investigated whether the increased use of agency staff has affected healthcare quality in hospitals. Given the limited recent research on this topic, practitioners remain uncertain about the effectiveness of their staffing strategies and their potential impact on quality. Drawing from agency theory, data were obtained from Definitive Healthcare which consolidates information from numerous public access databases pertaining to hospitals such as the American Hospital Association Annual Survey (hospital profile) and the Hospital Value-Based Purchasing Program (quality data). We conducted a cross-sectional study using a multivariable linear regression model (2021-2022) with appropriate organizational and market- level control variables. Quality was measured across eight variables while the independent variable of interest was agency labor cost ratio operationalized as the percentage of net patient revenue consumed by agency labor expense. Our results suggested that the employment of agency staff was significantly and negatively associated with six of eight quality measures tested, including the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) star rating, Hospital Compare rating, the hospital Total Performance Score (TPS), and three of the four sub-domains that comprise the TPS: clinical domain score, person and community engagement domain score, and the efficiency and cost reduction score. Our results indicated that the increased use of agency labor may have a significant negative influence on quality outcomes at the hospital level. Our findings support the premise that interventions that promote full-time staffing may be more supportive of the quality of care delivered as well as patients' perceptions of care.

Trends in HCAHPS Survey Scores, 2008-2019: A Quality Improvement Perspective.

HCAHPS' 2008 initial public reporting, 2012 inclusion in the Hospital Value-Based Purchasing Program (HVBP), and 2015 inclusion in Hospital Star Ratings were intended to improve patient experiences. Characterize pre-COVID-19 (2008-2019) trends in hospital consumer assessment of healthcare providers and systems (HCAHPS) scores. Describe HCAHPS score trends overall, by phase: (1) initial public reporting period (2008-2013), (2) first 2 years of HVBP (2013-2015), and (3) initial HCAHPS Star Ratings reporting (2015-2019); and by hospital characteristics (HCAHPS decile, ownership, size, teaching affiliation, and urban/rural). A total of 3909 HCAHPS-participating US hospitals. HCAHPS summary score (HCAHPS-SS) and 9 measures. The mean 2007-2019 HCAHPS-SS improvement in most-positive-category ("top-box") responses was +5.2 percentage points/pp across all hospitals (where differences of 5pp, 3pp, and 1pp are "large," "medium," and "small"). Improvement rate was largest in phase 1 (+0.8/pp/year vs. +0.2pp/year and +0.1pp/year for phases 2 and 3, respectively). Improvement was largest for Overall Rating of Hospital (+8.5pp), Discharge Information (+7.3pp), and Nurse Communication (+6.5pp), smallest for Doctor Communication (+0.8pp). Some measures improved notably through phases 2 and 3 (Nurse Communication, Staff Responsiveness, Overall Rating of Hospital), but others slowed or reversed in Phase 3 (Communication about Medicines, Quietness). Bottom-decile hospitals improved more than other hospitals for all measures. All HCAHPS measures improved rapidly 2008-2013, especially among low-performing (bottom-decile) hospitals, narrowing the range of performance and improving scores overall. This initial improvement may reflect widespread, general quality improvement (QI) efforts in lower-performing hospitals. Subsequent slower improvement following the introduction of HVBP and Star Ratings may have reflected targeted, resource-intensive QI in higher-performing hospitals.

Health Equity Adjustment and Hospital Performance in the Medicare Value-Based Purchasing Program

Medicare's Hospital Value-Based Purchasing (HVBP) program will provide a health equity adjustment (HEA) to hospitals that have greater proportions of patients dually eligible for Medicare and Medicaid and that offer high-quality care beginning in fiscal year 2026. However, which hospitals will benefit most from this policy change and to what extent are unknown. To estimate potential changes in hospital performance after HEA and examine hospital patient mix, structural, and geographic characteristics associated with receipt of increased payments. This cross-sectional study analyzed all 2676 hospitals participating in the HVBP program in fiscal year 2021. Publicly available data on program performance and hospital characteristics were linked to Medicare claims data on all inpatient stays for dual-eligible beneficiaries at each hospital to calculate HEA points and HVBP payment adjustments. Hospital Value-Based Purchasing program HEA. Reclassification of HVBP bonus or penalty status and changes in payment adjustments across hospital characteristics. Of 2676 hospitals participating in the HVBP program in fiscal year 2021, 1470 (54.9%) received bonuses and 1206 (45.1%) received penalties. After HEA, 102 hospitals (6.9%) were reclassified from bonus to penalty status, whereas 119 (9.9%) were reclassified from penalty to bonus status. At the hospital level, mean (SD) HVBP payment adjustments decreased by $4534 ($90 033) after HEA, ranging from a maximum reduction of $1 014 276 to a maximum increase of $1 523 765. At the aggregate level, net-positive changes in payment adjustments were largest among safety net hospitals ($28 971 708) and those caring for a higher proportion of Black patients ($15 468 445). The likelihood of experiencing increases in payment adjustments was significantly higher among safety net compared with non-safety net hospitals (574 of 683 [84.0%] vs 709 of 1993 [35.6%]; adjusted rate ratio [ARR], 2.04 [95% CI, 1.89-2.20]) and high-proportion Black hospitals compared with non-high-proportion Black hospitals (396 of 523 [75.7%] vs 887 of 2153 [41.2%]; ARR, 1.40 [95% CI, 1.29-1.51]). Rural hospitals (374 of 612 [61.1%] vs 909 of 2064 [44.0%]; ARR, 1.44 [95% CI, 1.30-1.58]), as well as those located in the South (598 of 1040 [57.5%] vs 192 of 439 [43.7%]; ARR, 1.25 [95% CI, 1.10-1.42]) and in Medicaid expansion states (801 of 1651 [48.5%] vs 482 of 1025 [47.0%]; ARR, 1.16 [95% CI, 1.06-1.28]), were also more likely to experience increased payment adjustments after HEA compared with their urban, Northeastern, and Medicaid nonexpansion state counterparts, respectively. Medicare's implementation of HEA in the HVBP program will significantly reclassify hospital performance and redistribute program payments, with safety net and high-proportion Black hospitals benefiting most from this policy change. These findings suggest that HEA is an important strategy to ensure that value-based payment programs are more equitable.

Medicare's Value-Based Purchasing And 30-Day Mortality At Hospitals Caring For High Proportions Of Black Adults.

The care of Black adults is highly concentrated at a limited set of US hospitals that often have limited resources. In 2011, the Medicare Hospital Value-Based Purchasing (VBP) Program began financially penalizing or rewarding hospitals based on thirty-day mortality rates for target conditions (myocardial infarction, heart failure, and pneumonia). Because the VBP Program has disproportionately penalized resource-constrained hospitals caring for high proportions of Black adults since its implementation in 2011, clinicians, health system leaders, and policy makers have worried that the program may unintentionally be widening racial disparities in health outcomes. Using Medicare claims for beneficiaries ages sixty-five and older who were hospitalized for three target conditions at 2,908 US hospitals participating in the VBP Program, we found that thirty-day mortality rates were consistently higher for two of three conditions at hospitals with high proportions of Black adults compared with other hospitals. There was no evidence of a differential change in thirty-day mortality among all Medicare beneficiaries with targeted conditions at high-proportion Black hospitals versus other hospitals seven years after the implementation of the VBP Program. However, gaps in mortality between these sites did widen in the subgroup of Black adults with pneumonia. These findings highlight that important concerns remain about the regressive nature and equity implications of national pay-for-performance programs.

Increasing illness severity of skilled nursing facility patients over time: Implications for readmission penalties.

Current financial penalties for rehospitalization of skilled nursing facilities (SNFs) patients are based in part on the studies by Ouslander et al., 2011, and Mor et al., 2010, demonstrating that many SNF hospitalizations were avoidable. With increasing age, complex illness severity, and use of SNFs for subacute rehabilitation, readmission metrics and financial penalties based on previous data may be due for reevaluation. Retrospective electronic medical record (EMR) review of 21,591 admissions and discharges between 2010 and 2019 inclusive. Data extracted included demographics, LACE, Charlson comorbidity index (CCI), and simplified HOSPITAL score parameters. The scores were calculated for the study years from the extracted data. Patients readmitted to the hospital within 30 days were identified. Mean yearly score of all three indices rose steadily: LACE score 10.76-12.04 (0.43 estimated annual increase, 95% CI [0.39, 0.46]), CCI 4.26-5.05 (0.31 estimated annual increase, 95% CI [0.27, 0.34]), and simplified HOSPITAL score 3.46-4.03 (0.21 estimated annual increase, 95% CI [0.18, 0.24]). The estimated probability of readmission across observed CCI scores ranged from 15.4% to 15.9%, 95% CI bounds (10.8%, 22.7%). The estimated probability of readmission across observed LACE scores ranged from 4.7% to 36.3%, 95% CI bounds (3.4%, 54.7%). The estimated probability of readmission across observed HOSPITAL scores ranged from 5.8% to 54.1%, 95% CI bounds (6.2%, 66.0%). The study confirms anecdotal experience that the illness acuity of patients admitted to SNFs increased progressively over time and was associated with an increased risk of 30-day readmissions to the hospital. Our study suggests that the use of clinically validated readmission risk assessment tools instead of the Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP) current risk adjustors may be a more accurate reflection of the current illness severity of a facility's patient population at the time of payment adjustment.

Hospital payment systems and physician reimbursement: A primer for radiology residents

Prior to practicing independently, radiology trainees spend considerable time and energy to learn and understand the practice of radiology. However, upon graduation trainees are often deficient in understanding the business of hospitals and the structure of reimbursement. Specifically, the workflow of relative value units (RVUs) and its impact on practice of radiology after completing training. In this manuscript, we provide a resource for trainees to understand the workflow of physician reimbursement. This article includes information on the mixed model healthcare structure of the United States and two government programs that influence reimbursement: Diagnosis-Related Groups (DRG) and Hospital Value-Based Purchasing (HVBP) programs. Furthermore, we explain the method by which the Center of Medicare and Medicate Service's (CMS) reimburses physicians via the Medicare Physician Fee Schedule (MPFS) using the Resource Based Relative Value Scale. Understanding the structure of these payments along with the challenges and current landscape of radiology reimbursement will help new radiologists prior to seeking employment where reimbursements are integral to contract expectations.

Improving Sepsis Outcomes in the Era of Pay-for-Performance and Electronic Quality Measures: A Joint IDSA/ACEP/PIDS/SHEA/SHM/SIDP Position Paper.

The Centers for Medicare & Medicaid Services (CMS) introduced the Severe Sepsis/Septic Shock Management Bundle (SEP-1) as a pay-for-reporting measure in 2015 and is now planning to make it a pay-for-performance measure by incorporating it into the Hospital Value-Based Purchasing Program. This joint IDSA/ACEP/PIDS/SHEA/SHM/SIPD position paper highlights concerns with this change. Multiple studies indicate that SEP-1 implementation was associated with increased broad-spectrum antibiotic use, lactate measurements, and aggressive fluid resuscitation for patients with suspected sepsis but not with decreased mortality rates. Increased focus on SEP-1 risks further diverting attention and resources from more effective measures and comprehensive sepsis care. We recommend retiring SEP-1 rather than using it in a payment model and shifting instead to new sepsis metrics that focus on patient outcomes. CMS is developing a community-onset sepsis 30-day mortality electronic clinical quality measure (eCQM) that is an important step in this direction. The eCQM preliminarily identifies sepsis using systemic inflammatory response syndrome (SIRS) criteria, antibiotic administrations or diagnosis codes for infection or sepsis, and clinical indicators of acute organ dysfunction. We support the eCQM but recommend removing SIRS criteria and diagnosis codes to streamline implementation, decrease variability between hospitals, maintain vigilance for patients with sepsis but without SIRS, and avoid promoting antibiotic use in uninfected patients with SIRS. We further advocate for CMS to harmonize the eCQM with the Centers for Disease Control and Prevention's (CDC) Adult Sepsis Event surveillance metric to promote unity in federal measures, decrease reporting burden for hospitals, and facilitate shared prevention initiatives. These steps will result in a more robust measure that will encourage hospitals to pay more attention to the full breadth of sepsis care, stimulate new innovations in diagnosis and treatment, and ultimately bring us closer to our shared goal of improving outcomes for patients.

Searching for the Best Yardstick: Cost of Quality Improvements in the U.S. Hospital Industry

The Hospital Value-Based Purchasing (VBP) Program is Medicare’s implementation of yardstick incentives applied to hospitals in the United States. Under the VBP Program, 2% of all Medicare payments to hospitals, estimated to be U.S. $1.9 billion in fiscal year 2021, are withheld and redistributed based on their relative performance in the quality of delivered care. We develop a dynamic mean-field equilibrium model in which hospitals are engaged in repeated competition under yardstick incentives. Using structural estimation methods, we recover key parameters that govern hospitals’ decisions to invest in quality improvement, including the financial and nonfinancial costs and uncertain outcomes of investment. By dynamically solving for hospitals’ individually optimal investment policies, we estimate the trajectory of quality improvements for each hospital, including its investment decisions and quality levels throughout the implementation of the VBP Program. Our counterfactual analyses explore the benefits, on the one hand, of modifying the overall size of the yardstick incentives and on the other hand, of implementing a more focused program tailored to hospital type. We find that increasing the size of the incentives from 2% to 4% would have resulted in an additional quality investment of U.S. $1.2 billion from 2011 to 2018, leading to a 3.3% reduction in the average rate of central line-associated bloodstream infections (CLABSIs). Applying yardstick incentives to the tailored hospital peer groups, even without changing the size of the incentives, can lead to an average reduction of 1.4% in the rate of CLABSI among groups of hospitals associated with the highest costs of quality investment. This paper was accepted by Stefan Scholtes, healthcare management. Funding: K. Moon acknowledges support from the Wharton School [Claude Marion Endowed Faculty Scholar Award]. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4875 .

The effect of patient quality measurements and HCAHPS patient satisfaction on hospital reimbursements

BACKGROUND: The Centers of Medicare & Medicaid Services (CMS) links hospital reimbursements to quality metrics. Likewise, the Hospital Value-Based Purchasing (VBP) program offers financial incentives to acute-care hospitals based on performance improvements on several quality measures included in the national Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. A research gap exists with regard to assessing the effectiveness of VBP incentives on improving the patient’s quality of care. OBJECTIVE: This study is to determine whether hospitals which reported better patient quality metrics and lower frequency of pressure sores received higher reimbursements. METHODS: The data were retrieved from the CMS Care Compare website utilizing matched data from 2297 US hospitals. Information on HCAHPS, the VBP Program in Patient Safety Index, and Reimbursements was obtained for this study. Partial Least Square (PLS) was utilized thru SmartPLS 3.0 to test the hypotheses. RESULTS: The results did not reveal any financial penalties when hospitals reported lower patient quality outcomes and increased numbers of pressure sores. However, lower patient quality measures were associated with lower patient satisfaction. Controversially, lower patient satisfaction scores were associated with higher reimbursement rates overall. CONCLUSIONS: The main contribution of this study reveals that the effectiveness of value-based reimbursements and the concept of continuous improvement is constrained due to the lack of unified measurement objectives across US healthcare institutions.

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

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.

Coaching to Bedside Shift Report and Its Correlation to Hospital Consumer Assessment of Healthcare Providers and Systems and Value-Based Purchasing Dimension Scores

The objective of this multihospital study was to investigate how the intervention of coaching to bedside shift report (BSR) correlates with Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) outcomes and relates to Centers for Medicare and Medicaid Services (CMS) Hospital Value-Based Purchasing (VBP) Program points over a 4-year period (2017-2020) for an acute care hospital health system. Hospital leaders' responsibilities include intertwined areas of patient experience and fiscal accountability. Coaching to BSR is reported to have numerous benefits to the patient's experience. Published studies completed with hospital systems evaluating the intervention of coaching to BSR and how it correlated to patient experience and VBP are limited. Coaching to BSR was implemented at 16 adult acute care hospitals. Patient-reported BSR rates were collected in tandem with HCAHPS for 4 years. Statistical correlations were assessed between patient-reported BSR and HCAHPS and consequential effect on VBP dimension scores. Coaching to BSR had a significant impact on top- and bottom-box "rate the hospital" HCAHPS scores at a system and hospital level. Value-based purchasing points and percentages increased over 2017-2020, potentially leading to lower CMS penalty claims over the period the BSR was implemented. Coaching is a key factor when creating a favorable patient experience. The implementation and sustainability of coaching to BSR may result in improved patient experience ratings and increase VBP point accumulation to hospital systems.

Moneyball in Medicare

One of the most important changes to the United States health care system over the last two decades is the emergence of pay-for-performance as a way to encourage hospitals and other providers to improve quality of care. Unlike fee-for-service, these value-based purchasing programs measure aspects of quality and financially reward hospitals that are outstanding or at least improving in their care. Prior research has shown that hospitals often improve more when the marginal financial incentives are larger. However, the exact relationship between marginal financial incentives and year-over-year improvement in measures remains unclear. In this study, we use national 20152018 data on approximately 2,700 hospitals to estimate how hospitals respond to pay-for-performance incentives in the Hospital Value-Based Purchasing (HVBP) Program. We show that this relationship is non-linear, has strong serial correlation, is somewhat similar for safety-net hospitals as non-safety-net hospitals, and is proportional to the size of the Medicare patient population.

Measuring the State Dependence Effect in Hospital Payment Adjustment.

Since FY 2013, as a part of the Affordable Care Act (ACA) program, the Hospital Value-Based Purchasing (HVBP) program has adjusted Medicare's payments to hospitals based on the total performance score of the hospital. First, the program reduces a portion of the hospital's Medicare payments in a specific fiscal year, and then, by the end of the same fiscal year, the amount of the payment reductions will be awarded to the hospitals based on the total performance score; thus, the hospitals that do not receive the reward will lose the portion of money reduced by Medicare. In this research, we apply the theory of state dependence and use the dynamic random effect probit model to estimate this effect. The results show that the hospital payment adjustment dynamics have a very significant state dependence effect (0.341); this means that hospitals that received a reward in the previous year are 34.1% more likely to receive a reward this year than the ones that received a penalty in the previous year. Meanwhile, we also find that the state dependence effect varies significantly across hospitals with different ownership (proprietary/government owned/voluntary nonprofit), and the results show that voluntary nonprofit hospitals exhibit the largest effect of state dependence (0.370), while government-owned hospitals exhibit the lowest effect of state dependence (0.293), and proprietary hospitals are in the middle. Among the factors that influence the likelihood that a hospital receives a reward, we find that teaching hospitals with a large number of beds (>400) are less likely be rewarded; in terms of ownership, we find that voluntary nonprofit hospitals are more likely be rewarded; in terms of demographic factors, hospitals where the average household income are higher within the region are more likely be rewarded.

Hospital value-based payment programs and disparity in the United States: A review of current evidence and future perspectives.

Beginning in the early 2010s, an array of Value-Based Purchasing (VBP) programs has been developed in the United States (U.S.) to contain costs and improve health care quality. Despite documented successes in these efforts in some instances, there have been growing concerns about the programs' unintended consequences for health care disparities due to their built-in biases against health care organizations that serve a disproportionate share of disadvantaged patient populations. We explore the effects of three Medicare hospital VBP programs on health and health care disparities in the U.S. by reviewing their designs, implementation history, and evidence on health care disparities. The available empirical evidence thus far suggests varied impacts of hospital VBP programs on health care disparities. Most of the reviewed studies in this paper demonstrate that hospital VBP programs have the tendency to exacerbate health care disparities, while a few others found evidence of little or no worsening impacts on disparities. We discuss several policy options and recommendations which include various reform approaches and specific programs ranging from those addressing upstream structural barriers to health care access, to health care delivery strategies that target service utilization and health outcomes of vulnerable populations under the VBP programs. Future studies are needed to produce more explicit, conclusive, and consistent evidence on the impacts of hospital VBP programs on disparities.

The role of community-level characteristics in comparing United States hospital performance by magnet designation: A propensity score matched study.

To assess the impact of community-level characteristics on the role of magnet designation in relation to hospital value-based purchasing quality scores, as health disparities associated with geographical location could confound hospitals' ability to meet outcome metrics. This cross-sectional study was carried out between October 2021 and March 2022 using data from 2016 to 2021. Propensity score analysis was used to match hospital and community-level characteristics, implementing nearest neighbour matching to adjust for pre-treatment differences between magnet and non-magnet hospitals to account for multi-level differences. Secondary data were obtained from all operational acute-care facilities in the United States that participated in the Centers for Medicare and Medicaid Services' hospital value-based purchasing (HVBP) program. Dependent variables were the four value-based purchasing domains that comprise the Total Performance Score (TPS; Clinical Care, Person and Community Engagement, Safety, and Efficiency and Cost Reduction). Magnet hospitals had increased odds for better scores in the HVBP domains of Clinical Care and Person and Community Engagement, and decreased odds for having better Safety. However, no statistically significant difference was found for the Efficiency domain or the TPS. Measuring performance equitably across organizations of various sizes serving diverse communities remains a key factor in ensuring distributive justice. Analysing the TPS components can identify complex influences of community-level characteristics not evident at the composite level. More research is needed where community and nurse-level factors may indirectly affect patient safety. This study's findings on the role of community contexts can inform policymakers designing value-based care programs and healthcare management administrators deliberating on magnet certification investments across diverse community settings. For this study of US hospitals' organizational performance, we did not engage members of the patient population nor the general public. However, the multi-disciplinary research team does include diverse perspectives.

Value-Based Payments in Health Care: Evidence from a Nationwide Randomized Experiment in the Home Health Sector.

Value-based payment programs, also known as pay-for-performance, use financial incentives to motivate providers to invest in quality and are a critical part of Medicare health care reform. This study examines the first year of the Home Health Value-Based Purchasing program, a nationally representative cluster randomized experiment implemented by the Centers for Medicare & Medicaid Services in 2016. The goal of the program is to achieve better home health care quality. Home health agencies in treatment states were rewarded or penalized based on their performance on agency-reported and non-agency-reported quality measures. The program improved agency-reported measures by approximately one percentage point, and performance gains suggest a dose-response relationship with respect to incentive size. However, the performance gains in agency-reported measures did not reflect true quality improvement. I find evidence that agencies manipulated their coding of patients and inflated their performance. Coding manipulation explains the entirety of the program's impact on agency-reported measures.

The Role of Social Risk Factors in Dialysis Quality and Patient Outcomes Under a Medicare Quality Incentive Program.

There have been critical improvements in dialysis care and mortality in the last decade. These improvements track with the implementation of the end-stage renal disease (ESRD) Quality Incentive Program (QIP) beginning in 2012, which aligns Medicare payments to dialysis facilities with performance on quality measures. This study explores whether the improvements in dialysis care and patient outcomes under the ESRD QIP have been shared equally among patient groups. Our analyses focus on 4 social risk factors: Black race, Hispanic ethnicity, dual eligibility for Medicare and Medicaid, and rurality. We estimated multivariable regressions using longitudinal Medicare and Consolidated Renal Operations in a Web-Enabled Network data. ESRD QIP payment reductions were more common at dialysis facilities with higher proportions of Black and dual-eligible ESRD patients. Patients with dual eligibility and Black race had persistently worse relative outcomes as the ESRD QIP was implemented. This finding was true for differences in outcomes when comparing patients within and across facilities and was not affected by the addition of specific quality measures to the ESRD QIP measure set. Hispanic patients and patients at rural facilities have generally not had worse outcomes since the start of the ESRD QIP. There is no evidence of widening disparities in dialysis care or patient outcomes across patient groups under the ESRD QIP, which is a longstanding and well-publicized concern with value-based purchasing programs. Relative changes between patient groups since the start of ESRD QIP have not favored any patient group. Many disparities in dialysis quality measures and assessment of dialysis facility payment reductions persist.

Association of the Medicare Value-Based Purchasing Program With Changes in Patient Care Experience at Safety-net vs Non–Safety-net Hospitals

Safety-net hospitals, which have limited financial resources and care for disadvantaged populations, have lower performance on measures of patient experience than non-safety-net hospitals. In 2011, the Centers for Medicare & Medicaid Services Hospital Value-Based Purchasing (VBP) program began tying hospital payments to patient-reported experience scores, but whether implementation of this program narrowed differences in scores between safety-net and non-safety-net hospitals is unknown. To evaluate whether the VBP program's implementation was associated with changes in measures of patient-reported experience at safety-net hospitals compared with non-safety-net hospitals between 2008 and 2019. This cohort study evaluated 2266 US hospitals that participated in the VBP program between 2008 and 2019. Safety-net hospitals were defined as those in the highest quartile of the disproportionate share hospital index. Data were analyzed from December 2021 to February 2022. The primary outcomes were the Hospital Consumer Assessment of Healthcare Providers and Systems global measures of patient-reported experience and satisfaction, including a patient's overall rating of a hospital and willingness to recommend a hospital. Secondary outcomes included the 7 other Hospital Consumer Assessment of Healthcare Providers and Systems measures encompassing communication ratings, clinical processes ratings, and hospital environment ratings. Piecewise linear mixed regression models were used to assess annual trends in performance on each patient experience measure by hospital safety-net status before (July 1, 2007-June 30, 2011) and after (July 1, 2011-June 30, 2019) implementation of the VBP program. Of 2266 US hospitals, 549 (24.2%) were safety-net hospitals. Safety-net hospitals were more likely than non-safety-net hospitals to be nonteaching (67.6% [371 of 549] vs 53.1% [912 of 1717]; P < .001) and urban (82.5% [453 of 549] vs 77.4% [1329 of 1717]; P = .01). Safety-net hospitals consistently had lower patient experience scores than non-safety-net hospitals across all measures from 2008 to 2019. The percentage of patients rating safety-net hospitals as a 9 or 10 out of 10 increased during the pre-VBP program period (annual percentage change, 1.84%; 95% CI, 1.73%-1.96%) and at a slower rate after VBP program implementation (annual percentage change, 0.49%; 95% CI, 0.45%-0.53%) at safety-net hospitals. Similar patterns were observed at non-safety-net hospitals (pre-VBP program annual percentage change, 1.84% [95% CI, 1.77%-1.90%] and post-VBP program annual percentage change, 0.42% [95% CI, 0.41%-0.45%]). There was no differential change in performance between these sites after the VBP program implementation (adjusted differential change, 0.07% [95% CI, -0.08% to 0.23%]; P = .36). These patterns were similar for the global measure that assessed whether patients would definitely recommend a hospital. There was also no differential change in performance between safety-net and non-safety-net hospitals under the VBP program across measures of communication, including doctor (adjusted differential change, -0.09% [95% CI, -0.19% to 0.01%]; P = .08) and nurse (adjusted differential change, -0.01% [95% CI, -0.12% to 0.10%]; P = .86) communication as well as clinical process measures (staff responsiveness adjusted differential change, 0.13% [95% CI, -0.03% to 0.29%]; P = .11; and discharge instructions adjusted differential change, -0.02% [95% CI, -0.12% to 0.07%]; P = .62). This cohort study of 2266 US hospitals found that the VBP program was not associated with improved patient experience at safety-net hospitals vs non-safety-net hospitals during an 8-year period. Policy makers may need to explore other strategies to address ongoing differences in patient experience and satisfaction, including additional support for safety-net hospitals.