Unbiased Analysis of Today's Healthcare Issues

Another VBP fail?

Written By: Jason Shafrin - Aug• 21•16

Value-based purchasing is supposed to tie reimbursement to quality of care and costs.  Providers that are high quality and low cost are supposed to get higher reimbursement, those that are low quality and high cost the reverse.  The key question is: does this reimbursement approach work in practice?

According to a recent study by Grabowski et al. (2016), the answer is probably not. Using data between 2008 and 2012 for skilled nursing facilities (SNF) in Arizona, New York and Wisconsin, the authors examine the impact of Medicares SNF value based purchasing (VBP) program and find:

Medicare savings were observed in Arizona in the first year only and Wisconsin for the first 2 years; no savings were observed in New York. The demonstration did not systematically impact any of the quality measures. Discussions with nursing home administrators suggested that facilities made few, if any, changes in response to the demonstration, leading us to conclude that the observed savings likely reflected regression to the mean rather than true savings.

In short:

The Federal nursing home pay-for-performance demonstration had little impact on quality or Medicare spending.

This evidence is disconcerting as CMS continues to push for value-based provider payments.

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One Comment

  1. Anonymous says:

    Actually, it’s not the evidence that’s disconcerting — the evidence is predictable. What’s disconcerting is that CMS is continuing to push for this approach and continues to burden clinicians with a whole host of requirements (such as meaningful use and MACRA requirements) that have no evidence for benefit. Not only do these initiatives take time away from interacting with patients, but they also contribute to increasing demoralization and burnout among physicians, particularly those in primary care specialties. Even initiatives such as health homes that should be beneficial are swamped by a panoply of requirements for goal setting and other required documentation. CMS needs to give greater consideration to its approaches to the health care delivery system in order to avoid negative consequences for clinicians and patients alike.

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