What is Value Based Purchasing?
Value based purchasing (VBP) is not unique to health care.
It is a strategy utilized by leaders including the federal government to use their market power to improve the quality and the value for the cost of the product. For health care the product is better, more cost effective patient care.
The goal of VBP is to manage the health care system to reduce inappropriate care and in the process reward the best performing providers.
Basic Principle: Service = Value Cost
The value of health care equals the service a patient receives divided by the cost of such care. High performing hospitals have found the way to give quality care at lower costs.
What is the Value Based Purchasing (VBP)Rule?
The CMS final rule stated that beginning with the Federal fiscal year 2013 (starting with the discharges of October 1, 2012) Medicare inpatient payment will be linked to quality performance for acute care facilities.
We are now starting the data collection period that will impact the VBP payment or penalty for fiscal year 2016.
A picture of value based purchasing
What is included in the CMS measure of value?
To determine the value of care, CMS will be looking at the core measure processes, outcomes of care such as mortality or healthcare acquired infections, efficiencies such as the cost of caring for a patient, the patient perception of their care (HCAHPS) and readmissions.
Core Measures
%
What does that mean in $?
For every 1 million Medicare dollars received a hospital have a 1%
progressing to 2 % payment reduction. This is - $10,000 the first
year and progresses to -$20,000 per $1,000,000.
Total Possible Impact
By FY2017, a facility is at risk of losing up to 6% of its Medicare payment.
That would be -$60,000 per every million Medicare dollars a facility should receive.
Using data from the PHC4 financial analysis FY 2010 report this would be a loss of $54,802,680.00 for the general acute care hospitals in Pennsylvania
How the money will be distributed.
This is a budget neutral program. There will be hospitals that will gain back more than their reduction and those that will lose a percentage or all of their reduction.
The Challenge
Every Hospital will work very hard to improve their
VBP score and this will keep increasing the results
needed to receive 100% of your facilities money back.
Sample: Baseline score of 68 equals 98%
return of Medicare reduction
\
The same score after nationwide improvements.
68 points = 50% return
The VBP Process
For FY 2016 the program will cover four domains:
1.Clinical process of care measures (Core Measures)
2. The patient experience of care (HCAHPS results)
3. Patient Outcomes
4. Efficiency measures
The Domain Weights
For FY 2016, the core measure score
will count for 10% of the total , HCAHPS
will make up 25%, the efficiency
measures 25% and the patient outcome
weight increases to 40%.
Where are we in the process now?
The data collection period for FY 2016 payment starts with the
patients discharged January 1, 2014.
The data will be collected for the entire calendar year.
CMS will analyze the results in early 2015 and will apply their findings to
the payments starting October 1, 2015 which is FY 2016 for Medicare.
What are the Current CMS Core
Quality Measure Sets included in VBP?
AMI
CHF
Pneumonia
Surgical Care Improvement Project
The Final Rule for 2014
The Final Rule reduces the number of core measure indicators included in VBP from 17 to 12 for FY 2015. The rule also reduces the number further for FY 2016, as the focus of the program is on patient outcomes rather than the process of care. While all of the Core Measures must still be collected and reported only the ones listed below will be included in the VBP scoring.
FY 2014 HCAHPS Measures
The VBP Process
CMS has set performance standards for each clinical process and the
patient outcomes.
To do this they established a minimum a threshold that a hospital
must meet to get any achievement points. ◦This was determined to
be the median (50%) of all hospital performance for the baseline
period.
They also established a benchmark score that will reflect the
mean of the top decile of all hospital scores.
The VBP Scoring Process
To determine the hospital achievement score CMS will give each hospital a score along a range between the achievement threshold and the benchmark threshold.
If the hospital meets or exceeds the benchmark they will get the maximum number of points for achievement which is 10. If the hospital does not reach the achievement threshold they will be given points for the improvement from their baseline to their performance score.
If the hospital receives 10 points on achievement; the improvement score is irrelevant and not calculated.
HCAHPS Scoring
HCAHPS scores are calculated in a similar fashion to the clinical process measures for achievement and improvement scores, but will also include a consistency score.
◦ The first 7 dimensions will be based on the % of top-box (always) responses. The overall rating will include scores of 9 and 10.
◦ Achievement threshold for each HCAHPS dimension would correspond to median performance in the baseline period (50th percentile of performance).
◦ The benchmark threshold will be the top decile of performance during the baseline period.
Consistency Scoring
• The HCAHPS domain also has a consistency score which recognizes consistent achievement across dimensions.
– Consistency points range from 0-20 and are based on the single lowest of a hospital's 8 HCAHPS dimension scores as compared to the achievement threshold.
– If the lowest score is less that the achievement threshold then the score will be based on the distance between the achievement threshold and the floor or 0th percentile of the baseline.
HCAHPS Consistency Points
©Ref. 2 MHA 2009
Efficiency
The efficiency measure is the Medicare spending per beneficiary which includes all charges incurred three days before admission until thirty days after discharge.
Each hospital will receive a mean score and those with the lowest charges will receive the higher number of points toward their VBP score.
Outcomes
The patient outcome measures include 30-day mortality for AMI, Heart Failure and pneumonia patients, and surgical site infections following colon surgery or abdominal hysterectomy.
The Patient Safety composite score is the final measure in the outcome set and includes the stage 3 or 4 pressure ulcer rate, iatrogenic pneumothorax rate, CLABSI rate, post- operative events including hip fracture rate, pulmonary emboli or deep vein thrombosis rate, sepsis rate, wound dehiscence rate and accidental puncture or laceration rate.
To be Successful
As you can see from the scoring explanations every improvement counts greatly in the final score. A hospital cannot focus on just one indicator or measure set and hope to earn all of their money back.
It will take teamwork and accountability from everyone to be successful in the pay-for -performance environment.
In Summary
Health Care has entered the pay-for –performance world. Through the next several years more aspects of care will be included in the scoring process. We do not know all of the processes or measures that will be utilized in the health care reform initiatives but we do know there will be constant change and the success bar will continue to move upward.
We will update our educational programs as these changes are made available.
References:
1. “Clinical Excellence is NOT enough”- M. Tray Dunaway, MD FACS CSP
2. “CAHPS: Impact on Healthcare”- Katie Drevs, Improvement Manager Press Ganey Associates, Inc.