As the Affordable Care Act, signed into law March 23, 2010, moves toward its third anniversary, more of its incremental changes are being implemented. One of those changes, that of linking hospital quality of care with at least some of its Medicare reimbursement, is now in full swing.
This shift in payment will financially reward those hospitals who provide the best care based on 25 quality standards rather than on the number of procedures and tests performed. The intent of this shift is to promote the best health care possible for hospital treatment, rather than encouraging health care providers to order sometimes unnecessary X-rays, lab tests and other diagnostic testing. The desired outcome is both an improvement in the hospital care that each patient receives and an overall decrease in health care costs by ceasing to reward quantity over quality.
Interestingly, eight of the current 25 quality standards are based on patient satisfaction: communication with nurses; communication with doctors; responsiveness of hospital staff; pain management; communication about medicines; cleanliness and quietness of hospital environment; discharge information and overall rating of the hospital.
Practical Application of Medicare's Value-Based Purchasing
The value-based purchasing quality standards only affect 1 percent of Medicare's payment to each hospital, an amount that will expand to 2 percent over the next four years. This portion of each hospital's payments do not affect capital costs, only those services directly linked to the present 25 quality measures.
In addition to patient satisfaction, which comprises 30 percent of a hospital's total score, the other 70 percent is based on specific standards in care for acute myocardial infarctions, heart failure, pneumonia and a surgical care improvement project.
Reactions of Health Care Professionals
Dr. Patrick Torcson, chairman of performance and standards for the Society of Hospital Medicine, explained to BankRate.com that value-based purchasing doesn't put any new money into Medicare payments, but instead, "Poorly performing hospitals receive less, highly performing hospitals receive more."
Dr. Michael Henderson, chief of quality at the Cleveland Clinic, related that he feels these changes in rewarding quality over quantity is "the tip of the iceberg for where we are going," reported MedPageToday.com.
Like any system, there are likely to be some types of hospitals more likely than others to be financially rewarded in value-based purchasing: teaching hospitals, large hospitals, and hospitals who treat large numbers of the poor are less likely than smaller hospitals and those that treat the affluent to score highly in all the quality measures.
As hospitals strive to achieve the highest scores in order to receive the highest percentage of payment from the nation's largest insurance system, patients are likely to feel the impact in a positive manner. This will most immediately impact baby boomers and their seniors who are covered by Medicare, but can private health insurance companies be far behind in applying such quality standards?
Patient satisfaction, 30 percent of the total quality score, is likely to become even more important to hospitals than it has been. How can there be a downside to that?
More prudent spending by the federal government in its Medicare dollars, less emphasis on tests and procedures not always entirely necessary for diagnosis or treatment and more emphasis on quality health care sounds like a win-win for the American health care consumer.
Any time you'd like to know how your hospital has scored, or wish to compare hospitals, you can do so at Medicare's Hospital Compare site.