Safety-net hospitals more likely than other hospitals to fare poorly under Medicare's value-based purchasing

Area of Science:

• Health policy research
• Healthcare economics
• Hospital administration

Background:

• Medicare's Value-Based Purchasing (VBP) program financially incentivizes hospitals for quality of care.
• The VBP program's algorithm determines penalties and rewards based on performance measures.
• Safety-net hospitals may face unique challenges within value-based payment models.

Purpose of the Study:

• To assess the impact of incorporating patient mortality measures into the VBP program in 2014.
• To determine if this inclusion disproportionately affected safety-net hospitals compared to other hospitals.
• To analyze the performance of safety-net hospitals on process, patient experience, and mortality measures.

Main Methods:

• Analysis of Medicare VBP program data from 2014.
• Comparison of penalty and reward rates between safety-net hospitals and other hospitals.
• Evaluation of performance on process, patient experience, and mortality measures within the VBP framework.

Main Results:

• Safety-net hospitals were more likely to receive payment reductions under the VBP program (63% vs. 51%).
• Poorer performance on process and patient experience scores contributed to safety-net hospitals' penalties.
• Safety-net hospitals demonstrated comparable performance to other hospitals on patient mortality measures.

Conclusions:

• Despite comparable mortality performance, safety-net hospitals experienced greater financial penalties in the VBP program.
• The current VBP algorithm design may disadvantage safety-net hospitals.
• Increasing the weight of mortality measures in the VBP algorithm could mitigate financial disparities for safety-net hospitals.