Association Between Medicare's Mandatory Hospital Value-Based Purchasing Program and Cost Inefficiency.

Abstract:

BACKGROUND:The Patient Protection and Affordable Care Act instituted pay-for-performance programs, including Hospital Value-Based Purchasing (HVBP), designed to encourage hospital quality and efficiency. OBJECTIVE AND METHOD:While these programs have been evaluated with respect to their implications for care quality and financial viability, this is the first study to assess the relationship between hospitals' cost inefficiency and their participation in the programs. We estimate a translog specification of a stochastic cost frontier with controls for participation in the HVBP program and clinical and outcome quality for California hospitals for 2012-2015. RESULTS:The program-participation indicators' parameters imply that participants were more cost inefficient than their peers. Further, the estimated coefficients for summary process of care quality indexes for three health conditions (acute myocardial infarction, pneumonia, and heart failure) suggest that higher quality scores are associated with increased operating costs. CONCLUSION:The estimated coefficients for the outcome quality variables suggest that future determination of HVBP payment adjustments, which will depend solely on mortality rates as measures of clinical care quality, may not only be aligned with increasing healthcare quality but also reducing healthcare costs.

authors

Izón GM,Pardini CA

doi

10.1007/s40258-017-0357-3

subject

Has Abstract

pub_date

2018-02-01 00:00:00

pages

79-90

issue

1

eissn

1175-5652

issn

1179-1896

pii

10.1007/s40258-017-0357-3

journal_volume

16

pub_type

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