A Nashville-based company that crunched numbers to rank hospital care by outcomes, process measures, and patient satisfaction data submitted to the federal government says that providers must get used to the idea of pay for performance, regardless of whether they like it or not.
"Not surprisingly, many in the hospital industry are reluctant to embrace the concept of value in healthcare, though several value-based concepts have already taken hold," according to the new report by Data Advantage.
"In conversations that we have had recently, several healthcare executives have bemoaned the use of Core Measures to determine reimbursement, while others have decried benchmarking," the Data Advantage authors wrote.
"We would suggest that philosophical issues with the concept of [value-based purchasing] VBP and the financial realities of what Congress has proposed are two different things. We enjoy the philosophical debate as much as anyone, but we recommend that philosophy not prevent people from accepting reality."
Data Advantage developed its own formula to rank hospitals across the country, dividing them into the 10 federal regions I through X, and compared their scores two one-year periods, the most recent of which ended in April 2009. The report is scheduled for release tomorrow.
What they found is that the hospitals that had the best average scores for the 2008 data collection—Maine, Vermont, New Hampshire, Rhode Island, Massachusetts, and Connecticut—had the worst average scores in 2009, a drop of 11.04%. Only 23.12% of these New England hospitals averaged in the top quartile.
The hospitals that averaged the best scores in 2009 were those in region VII, which includes Iowa, Minnesota, Nebraska, and Kansas, where 34.34% of hospitals were in the top quartile. The regions ranking second to ninth were III, V, VIII, IV, II, VI, X, and IX.
In fact, hospitals in all but one of 10 regions of the country had lower scores compared with last year, with an average decline of 5% for those hospitals scoring above the 75th percentile. Only Region VII did performed better, improving by 4.65%.
Hal Andrews, Data Advantage CEO, said there are three important reasons for the differences between year one and year two.
First, the company increased the number of hospitals in the study from 1,415 to 2,987. Many smaller hospitals were included for the first time in the second year.
Second, in the second year, patient satisfaction data that hospitals are now required to submit to the federal government was included in the equation.
"During the first year, the hospitals that were doing well on patient satisfaction when it was voluntary were likely to volunteer reporting of that information. The second year, those who didn't report until they had to were included as well."
And third, while in the first year the equation factored 45% quality, 45% affordability and efficiency, and 10% patient satisfaction, in the second year the formula changed, so that quality was given 65%, affordability and efficiency 25%, and patient satisfaction 10%.
Data Advantage developed an algorithm to create a scorecard of value-based purchasing that it defines as its trademark, Hospital Value Index.