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Hospital Pay to Reflect Care Efficiency Soon

Cheryl Clark, for HealthLeaders Media, September 17, 2013

"Hospital A and hospital B could have the same inpatient and outpatient per beneficiary spending, but the physicians [of] hospital A could rely more frequently on skilled nursing and rehabilitation while hospital B's physicians could rely more on home health care. This will make hospital A look far more costly than B, even the source of the spending is outside of the control of the hospital," Premier's senior vice president for public affairs Blair Childs wrote CMS.

Additionally, Childs wrote, CMS is not adjusting each hospital's score based on patients' socioeconomic status, which can greatly influence spending and also is not within a hospital's control. Low-income patients may not have family systems of support, and may require more expensive post-acute care services. "There is clear evidence that variations in socioeconomic factors and beneficiary characteristics affect healthcare expenditures," he wrote.

In a letter in June, the AHA told CMS it "is concerned" because what is an appropriate level of services provided by certain specialists, such as radiologists and pathologists, during a hospitalization "is simply not yet known."

"Moreover," the AHA wrote, "this measure is being proposed as a hospital performance measure even though it reflects the performance of physicians…Some hospitals directly employ physicians; it may be reasonable to measure such hospitals on a physician services measure.

Other hospitals, however, contract with individual physicians or physician groups that have more independence, "making it difficult to assign accountability for physician services measures solely to hospitals."

The AHA cautions "that such measures should not be used to push only toward the lowest possible cost. In some cases, that low cost may be achieved when the patient does not get needed services."

Another concern expressed by both the AHA and Premier is that the efficiency measure has not yet been endorsed by the National Quality Forum.

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