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

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.

Smarter procurement could save NHS millions each year

A campaign that could save the NHS millions through procuring medical supplies more efficiently has been launched.

Quantifying opportunities for hospital cost control: medical device purchasing and patient discharge planning

OBJECTIVES

To quantify the potential reduction in hospital costs from adoption of best local practices in supply chain management and discharge planning.

STUDY DESIGN

We performed multivariate statistical analyses of the association between total variable cost per procedure and medical device price and length of stay, controlling for patient and hospital characteristics.

METHODS

Ten hospitals in 1 major metropolitan area supplied patient-level administrative data on 9778 patients undergoing joint replacement, spine fusion, or cardiac rhythm management (CRM) procedures in 2008 and 2010. The impact on each hospital of matching lowest local market device prices and lowest patient length of stay (LOS) was calculated using multivariate regression analysis controlling for patient demographics, diagnoses, comorbidities, and implications.

RESULTS

Average variable costs ranged from $11,315 for joint replacement to $16,087 for CRM and $18,413 for spine fusion. Implantable medical devices accounted for a large share of each procedure's variable costs: 44% for joint replacement, 39% for spine fusion, and 59% for CRM. Device prices and patient length-of-stay exhibited wide variation across hospitals. Total potential hospital cost savings from achieving best local practices in device prices and patient length of stay are 14.5% for joint replacement, 18.8% for spine fusion;,and 29.1% for CRM.

CONCLUSIONS

Hospitals have opportunities for cost reduction from adoption of best local practices in supply chain management and discharge planning.

Changes to the electronic health records market in light of health information technology certification and meaningful use

BACKGROUND

Health information technology (HIT) certification and meaningful use are interventions encouraging the adoption of electronic health records (EHRs) in the USA. However, these initiatives also constitute a significant intervention which will change the structure of the EHR market.

OBJECTIVE

To describe quantitatively recent changes to both the demand and supply sides of the EHR market.

MATERIALS AND METHODS

A cohort of 3447 of hospitals from the HIMSS Analytics Database (2006-10) was created. Using hospital referral regions to define the local market, we determined the percentage of hospitals using paper records, the number of vendors, and local EHR vendor competition using the Herfindahl-Hirschman Index. Changes over time were assessed using a series of regression equations and geographic information systems analyses.

RESULTS

Overall, there was movement away from paper records, upward trends in the number of EHR vendors, and greater competition. However, changes differed according to hospital size and region of the country. Changes were greatest for small hospitals, whereas competition and the number of vendors did not change dramatically for large hospitals.

DISCUSSION

The EHR market is changing most dramatically for those least equipped to handle broad technological transformation, which underscores the need for continued targeted support. Furthermore, wide variations across the nation indicate a continued role for states in the support of EHR utilization.

CONCLUSION

The structure of the EHR market is undergoing substantial changes as desired by the proponents and architects of HIT certification and meaningful use. However, these transformations are not uniform for all hospitals or all the country.

The cost of quality: how VBP scores correlate with hospital costs

A study sought to correlate projected total performance scores (TPSs) for hospitals under the Medicare value-based purchasing (VBP) program with routine costs as reported by each hospital for the corresponding measurement periods. The study focused on routine service costs and common departmental costs because they are generally shared among all hospitals. The study's findings suggest that these costs tend to be higher among hospitals that achieve higher levels of quality as measured by VBP scores.

New strategy for NHS procurement Manchester Conference Centre, 17 April 2012

Through the QIPP agenda, the NHS is expected to deliver procurement savings of pounds 1.2 bn by 2014/15. The question at the conference was--is that enough? The NHS as a whole is expected to deliver efficiencies of some pounds 20 bn, which implies that, if procurement was to take its fair share, savings of some pounds 3 bn-3.5 bn would be needed.

Constrained procurement across Europe

Most of us are aware that the financial climate across Europe at the moment is inevitably going to impact upon our way of working. This is particularly so in the area of procurement. Our surgeon 'gods' can no longer demand whatever they wish, and we as the new generation of 'Florences' cannot rub our lamps and produce the genies with their endless pots of gold.

Sound decisions. A guide to selecting ultrasound equipment

With so many options on the market, choosing the right ultrasound equipment for your facility can be daunting. This guide will help you navigate the marketplace and choose the best model to suit your needs.

Leading a value-based culture

Experts say the impending Medicare reimbursement program requires overhauling hospital operations, starting with hiring the right people.