Final Project Milestone Two

Value-Based Purchasing (VBP) Reform Value-Based Purchasing (VBP) Program is an initiative that was implemented by the Centers for Medicare and Medicaid Services (CMS) in 2013. The goals of this initiative are to reward acute-care hospitals with incentive payments using an approved set of measures and dimensions that are determine the quality care provided to Medicare beneficiaries”, evaluate how best clinical practices are followed by the hospitals, and how well patient experience is enhanced during hospital stays (CMS, 2017). In an article by the International Journal of Healthcare Management (2019), it was noted due to overwhelming costs associated with managing healthcare, in hopes of both improving healthcare as well as lower costs, Hospital Value-Based Purchasing (HVBP) was implemented by the CMS (2019). As mentioned earlier, was the purpose of rewarding excellence in achieving quality healthcare to Medicaid beneficiaries. The factors that were considered by Medicaid in the implementation of the HVBP initiative, is how best to reward hospitals for good results based on the quality (pay-per-performance) of services offered rather than quantity (fee-for-service), which ultimately would minimize the expenditure to Medicare (IJHM, 2019). However, a gap exists between patients receiving the best care equity in the fees charged by hospitals. The gap exists when patients are admitted to hospitals to receive the best care needed to make them well, but leave without achieving this, while the hospital is reimbursed in full by Medicaid. Enforcing value-based purchasing in hospitals is supposed to bridge the gap between patients receiving quality care in the hospitals and hospitals being accountable for ensuring that that care is provided effectively and efficiently. According to CMS, hospitals are scored using a set of quality domains, namely safety, clinical care, efficiency of cost reduction, and patient experience, each with a percentage point 25 (CMS, 2017). Based on the hospital’s performance throughout a particular fiscal period, the total performance score (TPS) is used to determine the reward payment the hospital should receive. Funding for HVBPs is generated “by reducing hospitals’ base operating MS-DRG payments by 2.0 percent. Any leftover funds are redistributed to hospitals based on their TPS” (CMS, 2017). The domains are also scored based on baseline period and performance period as seen in excerpt taken from Hospital Value-Based Purchasing manual (CMS, 2017, p.14): In observing the data above, Clinical Care is scored every two years while the other domains are scored on calendar years. If HVBP rewards hospitals based on value-based performance and a big component of that is the services provided for patients, why is the baseline period for clinical care set at two years? How do patients benefit? In an interview with Ann Arbor of Michigan University, Andrew Ryan, an associate professor at the U-M School of Public Health said the following: "Hospital Value-Based Purchasing offered little patient benefit over four years. Other than an improvement in mortality for pneumonia, there were no significant differences in the quality of care or reductions in deaths at the hospitals that participate in the program compared with those that do not." (Ryan, A.2017). Ryan went further in saying that the measures in HVBP are “too complex and the incentives were likely too small," (2017). If the HVBP program is to be successful and have a positive impact, then the measures need to be simple enough for clinicians to understand (Ryan, 2017). In order for them to be able to provide patients with effective and efficient services, then clinician leaders should be able to understand and interpret the guidelines so they can know where they are falling short. If hospital administrators know where their shortcomings are, then they would be able to make changes (Ryan, A.2017). Ryan made another good point in asserting that for a policy to work, incentives must be large enough to capture the attention of hospital leaders so they can deploy resources to do the improvement work (2017).