Healthcare News & Insights

GAO: Quality programs have mixed results

Despite their growing popularity among payors, quality-based initiatives have been slow to improve quality in hospitals, according to one analysis. 

ThinkstockPhotos-491208537The Government Accountability Office (GAO) recently evaluated the Hospital Value Based Purchasing Program, created by the Centers for Medicare & Medicaid Services (CMS) to both reward hospitals providing high quality care and to punish those who fall short of federal benchmarks.

Revenue impact

So far, hospitals aren’t taking a huge hit with payment losses, though most received financial penalties of some kind. From FY 2013 to FY 2015, the majority of hospitals lost less than 0.5% of their Medicare payments to penalties. Less than 10% experienced more than a 0.5% pay cut each year.

As other research has noted, safety-net hospitals have fared the worst with value-based purchasing due to their disadvantaged patient mix. They’ve received smaller bonuses and larger penalties. But the GAO noted the gap between safety-net hospitals and other facilities has narrowed each year.

On the flip side, small urban hospitals have received smaller penalties and larger bonuses through the value-based purchasing program.

But even with these differences, the GAO noted the effect on hospitals’ bottom line has been minimal so far.

Effect on quality

Quality hasn’t improved much, either. The GAO didn’t see any significant changes in hospitals’ overall performance on value-based quality measures since the program began.

However, value-based purchasing is still in its infancy. Bigger changes may happen over time that’ll have a more significant impact on healthcare quality, especially since CMS plans to tie it even more closely to reimbursement.

And hospitals have faced challenges implementing widespread quality changes. The analysis specifically mentions how facilities have had trouble effectively using technology such as electronic health records (EHR) systems to make improvements to their care processes.

Improvement in one area

There’s one aspect of value-based purchasing that has been noticeably successful with boosting hospitals’ quality of care: CMS’ push to cut readmissions.

The GAO points out the readmission reduction program is the only Medicare initiative that gives hospitals penalties without any rewards for high performance. And since this program is shaping up to be more successful than other value-based purchasing initiatives, it may be sticking around for a while.

But, as the GAO notes, if CMS starts offering facilities incentives for reducing readmissions, care quality could improve even more. “The timing of changes in readmission trends provides some indication that the use of financial incentives in quality improvement programs may, under certain circumstances, promote enhanced quality of care.”

Future focus

CMS did review the analysis, so only time will tell if the agency takes the suggestion and incorporates bonuses into its readmissions reduction program. For now, hospitals need to continue to focus on improving quality. Even if the initial results of the value-based program aren’t overwhelmingly positive, these initiatives aren’t stopping any time soon.

Since other hospitals specifically cited technology issues as major barriers to improving quality, it may be time to huddle with your IT department and discuss how you can work together to overcome similar obstacles in your facility.

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