Question

In April of 2011, Medicare launched the Hospital Value Based Purchasing program. Discuss the essence of this program and then answer the following questions: Should providers be reimbursed on the basis of quality or care? How should quality be measured? Should the additional reimbursement to high-quality providers be obtained by reductions in reimbursement to low-quality providers?

Answer 1

The essence of Hospital Value Based Purchasing program was to incentivize higher quality care and to reduce mortality rates on that basis. The program aimed at rewarding (or penalizing) hospitals based on their performance. The performance was determined on the basis of different domains of care like clinical processes and outcomes.

Yes, providers should be reimbursed on the basis of quality of care. Value based care is more practical and optimal when compared to quantity of care because in the end the clinical outcomes is what matters. The model of reimbursing on the basis of quality of care will lead to value-based care and will focus on patient outcomes.

Quality of care will be measured on the basis of effectiveness of clinical processes and clinical outcomes. Quality of care will be measured by determining if the service has provided better care for individuals and to what degree and extent, has improved population health management and also has reduced healthcare costs. The focus will be on patient outcomes and improvement of preventive care.

No, the additional reimbursement to high-quality providers should not be obtained by reductions in reimbursement to low-quality providers. Low-quality providers should be encouraged to improve their delivery models and should be educated about the long term financial implications of providing and rendering low quality health care services.