Value Based Purchasing/Value Based Payment (VBP)

VBP has had more than one evident goal since its inception. There continues to be speculation concerning the degree to which one or more dominate the impetus for the model’s emergence. For example, in 2003, CMS began to pilot a hospital VBP model, which has since also been utilized by private insurers to discourage “inappropriate, unnecessary, and costly care” (Sultz and Young, 2014, p. 152). Two parameters, i.e. “clinical processes of care measures and “patient experience of care measures” (p. 152) as modifiers to hospital reimbursement. Hospitals performing well would receive financial benefit, while the reverse would be true for poorly performing hospitals (Advisory Board, 2015).

A “Triple Aim” for the VBP model is captured with the following introductory statement in the VBP publication from CMS, from Sylvia Mathews Burwell, Secretary of the U.S. Department of Health and Human Services: “Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a health care system that delivers better care, spends health care dollars more wisely and results in healthier people (CMS, 2015, p. 1).” Similar and yet somewhat different are the Institute for Healthcare Improvement’s Triple Aim elements of: population health, per capita cost and the patient experience (Institute for Healthcare Improvement, 2016). Of interest, that while the patient experience is not specifically mentioned with the HHS statement, it is prominent in the VBP model.

In addition to quantity of care, other measures include: “The quality of care provided to Medicare patients; How closely best clinical practices are followed…How well hospitals enhance patients’ experiences of care during hospital stays. How well they perform on each measure; or How much they improve their performance on each measure compared to their performance during a baseline period” (CMS, 2015, p. 1).

For 2016, the “domains” include: clinical process of care, patient experience of care, outcome, efficiency (p. 2).  These differ somewhat through 2018. For a fuller description please see the entire CMS document listed in the reference list.

In reading the elements contained within process of care, it appears they would be included within the concept of evidence-based clinical guidelines. The application of evidence based medicine is an attempt to standardize care, with the expectation that by doing so, there will be less variation in patient outcomes (Sultz and Young, 2014, pp 228-229). Outcomes can refer to what effects did providers have on their patients. Did they get better; did they get worse; were they cured; did they die; how did you change their quality of life; did you keep them healthy or make them healthier (Sultz and Young, (2014).

The measure for efficiency with the CMS VBP model is “Medicare Spending per Beneficiary” (CMS, 2015, p. 4). Of interest, the denominator is not cost divided by outcome or by process.

            Patient experience is measured by HCAHPS scores (CMS, 2015). The question arises as to how does the patient experience fit in with the other domains, and to what extent is it congruent with better care, healthier populations, greater efficiency, providing the right care or obtaining the best outcomes?

To what extent has VBP been successful relative to outcomes: Researchers, evaluating 100% Medicare inpatient claims data from 2008 through 2013, for patients admitted with “acute myocardial infarction, congestive heart failure, and pneumonia” concluded:  “Evidence that HVBP has led to lower mortality rates is lacking. Nations considering similar pay for performance programs may want to consider alternative models to achieve improved patient outcomes” (Figueroa et al, 2016).

In its first three years of implementation, GAO reported in a report from late 2015: “Medicare's Hospital Value-Based Purchasing Program has not yet led to increases in care quality overall… even before the program began in October 2012, hospitals had been improving in how consistently they followed basic clinical guidelines… improvement continued but did not increase with the advent of the financial incentives. The same was true for patient ratings, on such items as the quality of communication from doctors and nurses, and for mortality rates for heart attack patients. Heart failure and pneumonia death rates stayed roughly the same” (Rau, 2015). GAO further concluded “Our analysis found no apparent shift in quality measure trends during the initial years of the program, but such shifts could emerge over time as the program implements planned changes (Rao, 2015).”

The principles of VBP have become more pervasive in their application to more than just Medicare and to more than just hospitals, but have been adopted by many insurers and now apply to many types of providers. Miller (n.d.) provides an extensive analysis of VBP in terms of evident issues and makes suggestions for how these issues could be resolved. Below are some “cases” illustrative of some of these issues:

Issue: Physicians are penalized for caring for complex, high risk cases.

Case: A patient with diabetes and hypertension has been non-compliant with medication usage and diet. The physician practices evidence-based medicine, ordering all the “right tests,” all the
“right medication,” all the right “education and counseling.” The physician is employed by a health network and some part of “pay,” is linked to “productivity.” While the physician has practiced evidence-based medicine, the patient has poor outcomes. The patient continues to be unhappy with the care, because he does not like the restrictions the physician is trying to impose on his diet. Because patients such as this require an extensive time commitment from the physician, taking on such patients severely hamper the physician’s ability to meet productivity targets for enhanced “pay.” What is the likely reimbursement “penalty” because of likely poor outcomes and patient dissatisfaction? How likely is the practice to continue to make such high risk patients a major part of its care, knowing the likely reimbursement penalties?

                                                                                  References   

          

Advisory Board Company (October 6, 2015). One of Medicare's big value-based programs has delivered little value so far, GAO says https://www.advisory.com/daily-briefing/2015/10/06/gao-report

Department of Health and Human Services, Centers for Medicare & Medicaid Services. (September 2015). Hospital value-based purchasing. Retrieved from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Hospital_VBPurchasing_Fact_Sheet_ICN907664.pdf

Figueroa,J., Tsugawa, Y.,  Zheng, J.,  Orav, J., &  Jha, J. (May, 9, 2016).   Association between the Value-Based Purchasing pay for performance program and patient mortality in US hospitals: Observational study. BMJ 353 doi: http://dx.doi.org/10.1136/bmj. Retrieved from http://www.bmj.com/content/353/bmj.i2214

Institute for Healthcare Improvement (2016). IHI triple aim initiative. Retrieved from  http://www.ihi.org/Engage/Initiatives/TripleAim/Pages/MeasuresResults.aspx

Miller, H. (n.d.). Measuring and assigning accountability for healthcare spending: Fair and effective ways to analyze the drivers of healthcare costs and transition to value-based payment. Retrieved from  http://www.chqpr.org/downloads/AccountabilityforHealthcareSpending.pdf

Rao, J. (October, 2, 2015). Hospital care unaffected by quality Payments, GAO finds. Kaiser Health News. Retrieved from http://khn.org/news/hospital-care-unaffected-by-quality-payments-gao-finds/

Sultz, H., & Young, K. (2014). Health care USA (8^th ed.). Burlington, MA: Jones and Bartlett.

Submitted by Dr. Walter Markowitz, Adjunct Faculty, Saint Joseph's College