The Walmart of Healthcare

Hospital Value-Based Purchasing

One of the biggest legal changes to the United States health care system that will have a major impact on healthcare providers is the Federal Government’s new Hospital Value-Based Purchasing Program. Regardless if you are the manager at a large hospital system, an administrator at a smaller outpatient treatment facility or a doctor that treats Medicare patients; it is important to understand that the government wants to pay medical providers according to health outcomes of patients. This change presents a huge shift in current US healthcare policy where providers were traditionally paid for their services - regardless of patient health outcomes. This new hospital-based pay-for-performance system officially began in October 2012 and will be one of Medicare’s largest improvement campaigns.

So, what types of institutions are affected by the Value-Based Purchasing Program?

According to final rules and regulations created by the Center for Medicare and Medicaid Services, only short-term acute care hospitals will be affected by this new Obamacare provision. The program will not punish or incentivize critical access hospitals, psychiatric hospitals, rehabilitation centers, long-term care centers, children’s hospitals and cancer hospitals. Inevitably, many leading experts suspect that the government will eventually create rules that will include the institutions mentioned.  

What health measures does the Value-Based Purchasing Program look at?

Under the guidelines for the Hospital Value-Based Purchasing Program, there are 12 measures that the Center for Medicare and Medicaid Services will use to determine hospital performance. These measures look at mortality rates, AHRQ patient safety and hospital acquired conditions. Mortality measures include: Acute Myocardial Infarction, Heart Failure and Pneumonia. AHRQ patient safety measures include complication/patient safety for selected indicator and mortality for selected medical conditions. Hospital acquired condition measures include foreign object retained after surgery, air embolism, blood incompatibility, pressure ulcer states III & IV, falls/trauma, vascular-catheter associated infection, catheter-associated urinary tract infection and manifestations of poor glycemic control.  Essentially these measures will examine whether or not hospitals have been effective at providing treatment to patients who suffer from heart disease, hospital-borne infections, diabetes and other common diseases.

What does this mean for patient stay affecting hospital performance?

The Center for Medicare and Medicaid Services will also use the Hospital Consumer Assessment of Healthcare Providers and Systems Survey in order to measure patient satisfaction with healthcare delivery. The survey examines eight dimensions, which are the following: nurse communication, doctor communication, cleanliness and quietness, responsiveness of hospital staff, pain management, communications and medications, discharge information and overall hospital rating. The Center for Medicare and Medicaid will base 70 percent of hospital provider performance scores on the 12 health measures and 30 percent will be from patient satisfaction surveys. By 2015, the Value Based Purchasing program will apply to medical doctors who are apart of large medical groups (100 or more) and to all doctors by 2017.

How will hospitals be rewarded or punished?

In October 2012, the Center for Medicare and Medicaid Services reduced payments by one percent to all hospitals to create a new funding hospital value based purchasing (VBP) pool to be used to incentivize hospitals based on their ability to creative innovative programming and processes that lead to better patient health outcomes. Hospitals are eligible to receive back their payment reductions by improving health outcomes as well as patient satisfaction with medical treatment and hospital stay. By 2017, the Office of Medicare and Medicaid Services will increase the value base purchasing pool.  

How will Value-Based Purchasing impact long-term delivery of healthcare?

Eventually by 2017, all hospitals and medical providers that receive Medicare payments will have to work closely with each other in order to change patient behavior that will ultimately lead to improved patient outcomes. Through creating this pay-for-performance system, the Federal Government aims to control costs and save tax payers money by shifting the healthcare system away from quantity of treatment to quality of treatment. One of the big areas of focus for Obamacare is the focus on improving preventative healthcare treatment. This means that hospitals and doctors must work closely with other healthcare providers to create comprehensive preventative treatment options for patients that ultimately change their behavior. 

This includes getting patients to change dietary choices, encouraging patients to exercise and also improving overall quality of how healthcare facilities deliver in-patient medical services. If you are a doctor, healthcare administrator or a nurse practitioner, you should strive to start creating a comprehensive plan in terms of how your organization will begin creating and integrating preventive healthcare screenings, treatments and other services that will help patients get in control of their health. Healthcare providers should begin to start working with health and wellness coaches, personal trainers, exercise physiologists, nutritionists and psychologists that will address all aspects of patient health.

Topics: healthcare, Value-Based Purchasing

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