The Centers for Medicare and Medicaid Services (CMS) is the single largest payer of health care services in the country. As part of the Affordable Care Act (ACA), the government wants to exercise CMS’ power to reward and penalize the best and “least best” hospitals through the Hospital Value-Based Purchasing (VBP) Program.
On December 20, 2012, CMS came out with its first scorecard for almost 3, 000 hospitals across the country.
Winners
The Physicians Hospitals of America (PHA) trade association was quick to point out that the big winners were physician-owned hospitals (POH) which scored nine out of the top ten hospitals. Ironically, the ACA (aka Obamacare) bans POH hospitals from expanding Medicare beds. Of the 3, 000 hospitals participating in the program, less than 200 are physician owned, but those hospitals received 48 out of the top 100 ratings.
Paul Kerens, PHA’s president, said PHOs continue to provide the best quality within the new system of value-based purchasing. “These numbers do not surprise me; POH’s have always welcomed standards and competition and continue to consistently show they are top-rated. This is just one more way our communities can see that we provide the best care in America.”
Top Ten
Here are the top ten and their percentage bonuses:
- Treasure Valley Hospital, Boise Idaho (0.83)
- Lincoln Surgical Hospital, Lincoln, Nebraska (0.78)
- Baylor Medical Center at Trophy Club, Trophy Club, Texas (0.78)
- Tops Surgical Specialty Hospital, Houston, Texas (0.75)
- Marlboro Park Hospital, Bennettsville, South Carolina (0.74)
- Baylor Medical Center at Uptown, Dallas, Texas (0.74)
- Minden Medical Center, Minden, Louisiana (0.73)
- Irving Coppell Surgical Hospital LLC, Irving, Texas (0.73)
- Surgical Hospital at Southwoods, Youngstown, Ohio (0.73)
- Indiana Orthopaedic Hospital LLC, Indianapolis, Indiana (0.72)
Baylor Heart and Vascular Hospital, Dallas, Texas (0.72)
Midwest Surgical Hospital, Omaha, Nebraska (0.72)
Bottom Ten
The bottom ten? Read ’em and weep:
- Eastern Niagara Hospital, Lockport, New York, (-0.74)
- Pacifica Hospital of the Valley, Sun Valley, California (-0.75)
- Wiregrass Medical Center, Geneva, Alabama (-0.75)
- East Texas Medical Center Crocket, Crocket, Texas (-0.77)
- Memorial Hospital Sweetwater County, Rock Springs, West Virginia (-0.77)
- St. Joseph’s Hospital, Philadelphia, Pennsylvania (-0.78)
- Medical Center of Southeastern Oklahoma, Durant, Oklahoma (-0.80)
- Greater El Monte Community Hospital, South El Monte, California (-0.83)
- St. Anthony’s Hospital, Houston, Texas (-0.89)
- Auburn Community Hospital, Auburn, New York (-0.90)
Lessons From the Extremes
Nicholas Genna, CEO of Treasure Valley Hospital in Idaho, credited close attention to patients, including a low nurse-to-patient ratio and handwritten thank-you notes to patients, along with the fact that the doctors own the hospital. “People answer the phone with a smile on their face, ” he told Kaiser News.
Thomas Filiak, the chief operating officer at Auburn Community Hospital in New York, told Kaiser News that executives have begun a number of initiatives to lower noise near patient hallways, including putting new wheels on squeaky food carts. “They sounded like Mack trucks going through the hallway, ” he said.
Only 39% of Auburn patients reported their rooms were always quiet, below the national average of 60%, according to Hospital Compare. Filiak said the hospital has been improving the quality of the food, which a private survey company found was affecting patient satisfaction, and trying to improve by focusing teams of workers on the problems. Auburn’s low scores included its rate of giving the right antibiotic to surgery patients, which did not occur 11% of the time.
“We know we started off at the bottom, but we are going to work our way to much more acceptable scores, ” Filiak said. The penalty will cost Auburn an estimated $100, 000, he said, which the hospital’s $85 million budget can absorb without having to take drastic measures like layoffs.
Regional Winners and Loser
CMS also tracked results on a regional basis.
The Ft. Wayne, Indiana, region did best. Most bonuses went to hospitals in Maine, Nebraska, South Dakota, Utah, and South Carolina. The most penalized states and district are the District of Columbia, Connecticut, New York, Wyoming and Delaware.
Here are the best and worst of 212 market areas:
Top Ten Markets (by highest bonuses)
- Ft. Wayne, Indiana
- Greenville, South Carolina
- Newport News, Virginia
- Boise, Idaho
- Florence, South Carolina
- Bangor, Maine
- Grand Rapids, Michigan
- Jackson, Tennessee
- Portland, Maine
- Charleston, South Carolina
Lowest Ten Markets (by highest penalties)
- Washington, D.C.
- Buffalo, New York
- Bronx, New York
- Bakersfield, California
- Syracuse, New York
- Altoona, Pennsylvania
- Hartford, Connecticut
- Corpus Christi, Texas
- Saginaw, Michigan
- Springfield, Missouri
Big Names Shut Out
The hospitals that scored best are not the ones with the big reputations. New York-Presbyterian in Manhattan and Massachusetts General Hospital in Boston, for example, both dominant hospitals in their cities, will have their payments reduced. Other leading names in the hospital industry, including the Cleveland Clinic and Intermountain Medical Center in Utah, will receive bonuses, although not the largest in their regions.
Kaiser News reported that results for hospitals within the same system often varied. For instance, in Rochester, Minnesota, the Mayo Clinic’s Methodist Hospital will be getting a bonus. But Mayo’s flagship St. Mary’s Hospital, also in Rochester, will be losing money. Michael Rock, M.D., an orthopedic surgeon at the Mayo Clinic, said that Medicare’s scoring system tends to favor hospitals with patients like those at Methodist, which primarily does elective surgeries, over hospitals with lots of trauma and emergency cases, which St. Mary’s handles.
Michael Henderson, M.D., chief of quality at the Cleveland Clinic told Kaiser News, “To me, it’s the tip of the iceberg for where we are going, “We’ve been working on this for two or three years, and it really made us strive for excellent performance.”
Quality Over Quantity
CMS is changing the way it pays hospitals by rewarding hospitals for the quality of care they provide to Medicare patients, not just the quantity of procedures they perform. Hospitals are rewarded based on how closely they follow best clinical practices and how well hospitals enhance patients’ experiences of care.
Measures
The first are 12 “measures of timely and effective care” also known as “process” measures. The measures include clinical areas of acute myocardial infarction, heart failure, pneumonia, infections and surgeries.
The second set of eight measures is culled from surveys of patients who had recently left the hospital. These are frequently called “patient experience” or “patient satisfaction” measures. For these measures, Medicare only looked at the percent of patients who said they “always” had a favorable experience in these areas
For 2012 the process measures accounted for 70% of a hospital’s score and the patient satisfaction measures accounted for 30%. Medicare looked at both how a hospital did compared to its peers and how much it improved its own performance over time, and whichever score was higher was the one used to calculate its payment factor. Hospitals stood to lose or gain up to 1% of their regular Medicare reimbursements in the first year of the program. The amount of money at stake increases incrementally over the next four years to reach 2% of payments.
Incentive Funding Source
To pay for the program CMS reduced payments to all hospitals by 1%, estimated at $964 million. It then calculated a score on how much money each hospital deserved to get back based on the quality of its care. While every hospital is getting something back, almost half aren’t recouping the 1% they forfeited and thus are net losers.
The incentive payments come from the regular fees Medicare pays hospitals through its Diagnosis-Related Group (DRG) system. Hospitals participating in the program have their base operating DRG payments for each patient discharge across all hospitals reduced by a small percentage each year. The base operating DRG percent reduction is 1.0% for fiscal year (FY) 2013, 1.25% for FY 2014, 1.5% for FY 2015, 1.75% for FY 2016, and 2.0% for FY 2017 and subsequent years.
Overall, 1, 557 hospitals received bonus and 1, 427 received penalties.
Does It Matter?
Will these carrots and sticks work? Does more money translate into better care?
Interestingly, the RAND Corporation, which helped CMS design the purchasing program, just analyzed results from 61 studies comparing spending with outcomes.
What was the RAND Corporation’s conclusion? “Results are all over the map, ” and, “It’s totally unclear what the real relationship is.” Of the 61 studies, 21 showed a positive connection between spending and outcomes, 18 found worse outcomes and the remaining 22 studies showed no difference.
Raj Behal, M.D., senior patient safety officer at Rush University Medical Center in Chicago, which is getting a bonus, said the prospect of the financial incentives has not had a huge effect. “I wouldn’t say we’ve changed our course radically. All of these things were already on our radar, ” he said. “These are nuts and bolts measures. All of us should be doing these things right. But is that enough?”
