Value-Based Purchasing 2020: A 10-Year Progress Report

In 2020, 10 years after theAffordable Care Act(ACA) passed and became in law (March 2010), CMS and healthcare organizations are still evolving and adapting policies and strategies to optimize outcomes and performance undervalue-based care(VBC). The most publicized areas of the ACA involved increased coverage for the uninsured and those with pre-existing conditions. The ACA also started CMS efforts to design and implement value-based programs—devised to encourage providers to improve quality by granting incentives for meeting regulatorymeasuresor penalties for falling short.

CMS defines VBC as paying for healthcare services in a manner that directly links performance on cost, quality, and the patient’s experience of care. According toCMS, as of 2020, there are 31 programs defined as value-based; CMS sponsors 11 of these, and theCenter for Medicare and Medicaid Innovation(CMMI) defines 20.

What Value-Based Care Means to Health Systems

Three programs impacting health systems under VBC include the following:

1. TheHospital Value-Based Purchasing Program(VBP).
2. TheHospital Readmission Reduction Program(HRRP).
3. The减少医院获得性疾病方案(HACRP).

一般来说，每个方案都包括急性护理医院，但不包括专科医院，如儿童医院、关键通道医院、癌症医院、精神病医院、康复医院和长期护理医院。Because these programs use selected measures first specified under the HospitalInpatient Quality Reporting(IQR) Program, implemented in 2003, organizations were already reporting these measures, making them a natural basis for penalties and bonuses under VBC programs.

CMS报告并计算以前一段时间(通常提前一到三年)的年度测量值。例如，该机构基于2015年7月至2018年6月的数据得出了2020年的死亡率结果。CMS then shares the measures, definitions, and time periods with health systems for review and correction and makes the measures available on the public websiteHospital Compare.

然后，该机构调整了联邦财政年度医院医疗保险严重性诊断相关组(MS-DRG)的运营费用，以反映这些措施的结果。如果再入院措施显示需要改善，医院可能会收到0 - 3%的罚款——从MS-DRG付款中扣除。联邦医疗保险围绕重新入院设计了这个项目，因为住院病人的住院费用在联邦医疗保险总开支中所占比例最大。

Generally, CMS also scores hospitals in relation to each other, with the measures moving (recalibrated) as hospitals improve their performance. With this process, approximately the same number of hospitals will always receive an annual penalty. Under HACRP, for example, 25 percent of hospitals will receive a penalty each year. One exception is VBP, which scores on both improvement and achievement.

A Summary of Hospital Value-Based Programs

The following chart (Figure 1) is a summary of hospital value-based programs:

Program	Starting Year	Structure
VBP	2012	基于四个领域的奖励或惩罚;一项预算中性的计划，激励或惩罚可能为正负2%。
HRRP	2012	Currently maximum penalty of 3 percent on all MS-DRGs for excess readmission rates for 6 conditions.
HACRP	2015	All hospitals above the 75th对所有ms - drg征收1%的罚款。

The above structure converts to a maximum penalty in 2020, equating to a 6 percent decrease on the MS-DRG operating payment for all three programs. In 2020, approximately 400 hospitals, or 12 percent of total eligible hospitals, received a penalty in all three programs, with penalties for those 400 hospitals totaling close to $400 million.

A 2015Health Affairsstudy showed a bias against teaching hospitals and hospitals with greater than 400 beds, with those hospitals showing a mean penalty of -0.9 and -0.8, respectively. These rates are close to double the average hospital payment adjustment of -0.5.

The Value-Based Purchasing Program

In 2020 the VBP Program distributed a bonus payment to 56 percent of the eligible hospitals, or 1,530 acute care hospitals, with a median bonus of .4 percent of MS-DRG payments. This equates to a median payment of $65,000. Ten hospitals received over $1 million for their performance. On the downside, 1,200 hospitals received a penalty (median of .3 percent or $88,000). VBP is a budget-neutral program supported through a 2 percent reduction to payment; these funds are redistributed to hospitals achieving the higher scores on the measures.

VBP scoring for 2020 comprises four domains, each weighted at 25 percent:

• Clinical outcomes: includes mortality for acute myocardial infarction (AMI), heart failure (HF), pneumonia (PN), and complications for hip and knee arthroplasty (THA/TKA).
• Efficiency and cost reduction: measured by the Medicare spend per beneficiary report.
• Safety: includes perinatal care (PC-01, elective delivery prior to 39 weeks) and hospital-acquired condition (HAC) scores.
• Person and community engagement: measured byHospital Consumer Assessment of Healthcare Providers and Systems(HCAHPS) survey.

The HACRP also measures HAC scores in the safety domain. Therefore, hospitals with low scores on these measures can receive a penalty in both programs.

VBP分数为成就和改进提供了单独的分数:成就使用一个阈值和基准来进行医院比较，组织如果达到阈值，就会获得与基线相比改进的分数。Adding the higher score of achievement or improvement then generates aTotal Performance Score(TPS).

Impact of the Value-Based Purchasing Program

Since its launch in 2012, VBP has made the following impacts:

• A modest effect on payment: Initial results of a 2015 U.S. Government Accountability Office (GAO)studyon VBP showed a modest effect on payment and no apparent change in quality of care, as well as no apparent shift in the quality metrics VBP employs. Hospitals didn’t report any changes in focus with this program, but the GAO study acknowledged potential for metrics shifts as the program adjusted metrics and weights for scoring.
• No change in patient outcomes: A 2016BMJ studyfound no evidence that the program had improved patient outcomes. The study, which focused on mortality rates, found no significant changes.
• A need for improvement: The title of aJAMA forumblog by Ashish K. Jha, MD, MPH, gives a good summary of the author’s opinion: “Value-Based Purchasing: Time for Reboot or Time to Move On?” Dr. Jha states the current structure of the program is not producing the originally envisioned results. He lists three efforts that would improve the program:
  • Larger incentives.
  • Fewer measures.
  • Simpler design.
• Recommended Redesign: The医疗保险支付咨询委员会(MedPAC) recommended to Congress redesigning VBP programs and establishing one single incentive program. Criteria for incentive would include importance of HAC, emphasis on patient experience, and refinement of incentive pools. The MedPAC 2019 report stated the current programs have issues with regulatory burden, overlap, lack of fixed measures, and need to focus on all-condition mortality and readmission measures.

In 2020 there were3,129 hospitals在VBP项目中。其中，547家(18%)没有受到处罚，2583家医院受到处罚。56家医院收到了MS-DRG手术费用最多减少3%的处罚。演出期间为2015年7月至2018年6月。

The Hospital Readmission Reduction Program

当再入院人数超过预期水平时，HRRP将减少向医院支付的款项。An excess readmission rate is calculated for a 30-day risk-adjusted unplanned readmission for the following conditions:

• AMI.
• Chronic obstructive pulmonary disease (COPD).
• HF.
• PN.
• Coronary artery bypass graft (CABG) surgery.
• Elective primary THA/TKA.

The HRRP doesn’t include theHospital-Wide All-Cause Readmission(HWR) measure, and readmission measures for a hospital with fewer than 25 cases would not be included in the calculation.

CMS根据三年内符合双重条件的住院比例，将医院分配给五个对等组。该机构在2019年补充了这一比较，以考虑到更复杂的患者以及对再入院的影响。减幅范围从3%到不减幅不等，减幅适用于所有ms - drg。

With the HRRP program, CMS is encouraging providers to increase communication and care coordination and be responsible for a patient’s post-discharge care.

Impact of the Hospital Readmission Reduction Program

In a 2018report, MedPAC stated the HRRP had been successful for beneficiaries and the Medicare program, with readmission rates declining after its implementation. Moreover, the decline did not materially increase outpatient observation or emergency department visits or adversely impact mortality. Rates declined from 2012 to 2016 by 3.6 percent for AMI, 3 percent for HF, and 2.3 percent for PN (Figure 2).

The Hospital-Acquired Condition Reduction Program

CMS对HACRP中表现最差的25%的医院实行1%的固定减支。该机构设计这个项目是为了提高患者的安全性，减少HACs的数量。CMS estimates the program saves$350 millionannually.

CMS calculates the patient-safety score using the following measures with PSI 90 in Domain 1 as one measure and each healthcare-associated infection (HAI) as a separate measure in Domain 2, for a total of six measures:

Domain 1

The following CMS Patient Safety Indicator (PSI) 90 measures for discharges from July 2016 through June 2018 measures count as one measure in the HAC program:

• PSI 03 — pressure ulcer rate.
• PSI 06 — iatrogenic pneumothorax rate.
• PSI 08 — in-hospital fall with hip fracture rate.
• PSI 09 — perioperative hemorrhage or hematoma rate.
• PSI 10 — postoperative acute kidney injury requiring dialysis rate.
• psi11 -术后呼吸衰竭率。
• psi12围手术期肺栓塞或深静脉血栓形成率。
• psi13 -术后脓毒症发生率。
• 术后伤口裂开率。
• PSI 15 — unrecognized abdominopelvic accidental puncture/laceration rate.

Domain 2

The Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) HAI measures for discharges January 2017 to December 2018 each receives a score and counts as one measure (for a total of five):

• 中心静脉相关性血流感染(CLABSI)。
• Catheter-associated urinary tract infection (CAUTI).
• Surgical site infection (SSI) (colon and hysterectomy).
• Methicillin-resistant staphylococcus aureus (MRSA) bacteremia.
• 艰难梭菌感染(CDI)。

In 2020 785 hospitals received a penalty under HACRP, with an average penalty of $350,000. TheAmerican Hospital Association(AHA) has commented on this program and the inherent bias in the formulas. An AHA study shows the penalties disproportionately impact teaching and large urban hospitals. There is not an adequate method to risk adjust the data.

Impact of the Hospital-Acquired Condition Reduction Program

TheAgency for Healthcare Research and Quality(AHRQ) shows the rate of HACs declining. From 2010 through preliminary 2017 data, the average annual reduction in the overall rate of HACs was approximately 4.5 percent. The 2014 rate started at 99 HACs per 1,000 hospital discharges and is estimated at 86 HACs per 1,000 discharges for 2017. Based on these reductions compared with 2014, the AHRQ estimates a total of 910,000 fewer HACs in 2017. These HAC reductions link to savings estimates of approximately $7.7 billion in costs and approximately 20,500 fewer HAC-related inpatient deaths.

A 2019studyfound improvements in rates of conditions pre-HACR from 133.4 per 1,000 discharges to post-program of 122.2 per 1,000 discharges. This study concluded the CMS program did not improve patient safety beyond existing trends because greater improvement was observed in non-targeted measures (which are not part of the CMS HACRP). CMS states HACRP has yielded2.1 millionfewer incidents of harm and $28 billions of savings.

The Spread of Value-Based Programs

Both commercial payers and Medicaid lag behind Medicare in the spread of VBP. Several commercial payers have adopted programs to move to VBP, and Medicaid will vary by state, but momentum toward the value scale has accelerated:

• UnitedHealthcare发布了一份基于价值的报告，称其基于价值的计划覆盖了11万名医生和1100家医院;支付方希望继续扩大VBP，推动清晰、可衡量的变革。
• Humana, which has reported on its value-based care results for the past six years, sees continued support for the value model to improve the health and experience of patients and providers.
• According to theInstitute for Medicaid Innovation’s2019 Annual Medicaid Managed Care Survey, approximately 95 percent of the responding health plans used an alternative payment model or VBP arrangement for large and medium-size plans (over 250,000 covered lives). The majority of health plans (82 percent) have implemented value-based arrangements with primary care providers, while less than 15 percent of payments to hospitals are under this type mechanism.

The Industry Response to Value-Based Programs

Medicare is a large payer, representing generally over 35 percent of a health system’s gross revenue, based on California’s Office of Statewide Health Planning and Developmenthospital data. To keep the payments from decreasing, organizations need to manage and improve their quality metrics. Leading organizations are preparing for an increasing percentage of value-based arrangements in the future.

The following examples show systems moving to the new model of value:

• Jefferson Health signed a three-year VBC contract with Independence Blue Cross. According to John Brand, Jefferson’s chief communications officer, thenew contract“aligns reimbursement with preventive care rather than sick care.”
• 克里斯蒂安娜医疗保健系统总裁兼首席执行官Janice Nevin博士表示，克里斯蒂安娜医疗保健系统正积极寻求与政府付款人和基于价值模型的商业计划合作。In a2019 publication, Nevin stated that commercial payers are coming to the table differently, giving her organization more opportunity to move from volume to value.
• The State of New York is pushing their Medicaid program into the new VBP paradigm. In October 2019,Health Leadersinterviewed Mark Wright, CFO at Niagara Falls Memorial Medical Center. He broke the contracts with Medicaid into two levels: level 1 as a model of sharing cost savings and level 2 a form of capitation with quality metrics the hospital will need to meet to participate in both upside and downside risk.

Value-Based Strategies for Health Systems

Health systems can prepare for increasing value-based programs by taking the following steps:

• Develop a formal system to track the measures in the various programs: The highest priority should be placed on the scores that track with the institution’s mission and priorities, using an appropriate analytics tool. The Health Catalyst® Community Care Accelerator, for example, generates reports that show metrics, allowing users to drill down to the provider level and see the gaps for specific measures. Once the measures are visible in an organization, assigning management accountability for the measures will ensure success.
• 了解组织在CMS项目中的分数:CMS每年为组织提供一段时间来审查他们的分数。各组织必须审查这些数据，以确保其准确反映其设施的护理状态。Thisdatais available to the public and should be correct.
• Identify both areas of excellence and areas that need improvement: Organizations can leverage predictive tools such as the following to enhance their performance monitoring:
  • A surveillance tool that combines clinical knowledge and data can help monitor, detect, predict, and prevent threats to patient safety before harm can occurs. (e.g., the Health Catalyst® Patient Safety Monitor™ Suite: Surveillance Module).
  • A machine learning-enabled tool can add predictive capability to try to prevent future readmissions with appropriate interventions (such as the Health Catalyst® Readmission Explorer, which shows the trends in readmissions). For instance, one hospital may have a great score for heart failure, but it needs to improve in pneumonia; focusing on the process in pneumonia would reveal opportunities for interventions to decrease the readmission rate (e.g., looking into follow-up visits and understanding patient communication with their primary care physician).

• Identify performance plans that need additional support: Organizational management needs to help navigate roadblocks to value and ensure problems are solved. Complex healthcare processes often demand multidisciplinary team. Putting the patient at the center and using all community resources will help. Hospitals will need to partner with facilities involved in post-acute care as well as other entities that can help in overall population management.

Value-Base Care: 10 Years of Growth, Change, Challenges

Hospitals have learned from the Medicare value-based programs since 2010, with the emphasis on quality and cost proving to be a positive trend for the healthcare industry. Significant readmission improvements are benefiting health systems and patients, but organizations still need to improve and refine programs overall with an eye to simplification and consolidation. The industry also needs bring all stakeholders together to actively participate in healthcare improvement and question whether the current measures represent value to providers, payers, and patients.

In aMarch 2020blog post, healthcare policy analyst Paul Keckley, PhD, summarized the current state of the U.S. system, explaining: “The transition from volume to value is inevitable but the road from here to there is bumpy.” With both inevitability and obstacles projected, healthcare organizations have the opportunity now to reevaluate and adapt larger changes to their programs and leverage predictive tools in preparation for the next decade of VBC.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

1. From Volume to Value: 10 Essential Strategies for Navigating the Healthcare Shift
2. Value-Based Care: Four Key Competencies for Success
3. The Medicare Shared Savings Program: Four Tools for Better Profit Margins and High-Quality Care
4. Increased Visibility into Value-Based Performance Results in $2.1M in Additional Pay for Performance