title: Adding A Spending Metric To Medicare's Value-Based Purchasing Program Rewarded Low-Quality Hospitals.
abstract: In fiscal year 2015 the Centers for Medicare and Medicaid Services expanded its Hospital Value-Based Purchasing program by rewarding or penalizing hospitals for their performance on both spending and quality. This represented a sharp departure from the program's original efforts to incentivize hospitals for quality alone. How this change redistributed hospital bonuses and penalties was unknown. Using data from 2,679 US hospitals that participated in the program in fiscal years 2014 and 2015, we found that the new emphasis on spending rewarded not only low-spending hospitals but some low-quality hospitals as well. Thirty-eight percent of low-spending hospitals received bonuses in fiscal year 2014, compared to 100 percent in fiscal year 2015. However, low-quality hospitals also began to receive bonuses (0 percent in fiscal year 2014 compared to 17 percent in 2015). All high-quality hospitals received bonuses in both years. The Centers for Medicare and Medicaid Services should consider incorporating a minimum quality threshold into the Hospital Value-Based Purchasing program to avoid rewarding low-quality, low-spending hospitals.
authors.affiliation: Anup Das (anupdas@umich.edu) is an MD/PhD student in the Department of Health Management and Policy at the University of Michigan, in Ann Arbor.
authors.forename: Anup
authors.initials: A
authors.lastname: Das
authors.affiliation: Edward C. Norton is a professor in the Department of Health Management and Policy, the Department of Economics, and the Institute for Healthcare Policy and Innovation, all at the University of Michigan, and a research associate of the National Bureau of Economic Research, in Cambridge, Massachusetts.
authors.forename: Edward C
authors.initials: EC
authors.lastname: Norton
authors.affiliation: David C. Miller is an associate professor in the Department of Urology and the Institute for Healthcare Policy and Innovation, both at the University of Michigan.
authors.forename: David C
authors.initials: DC
authors.lastname: Miller
authors.affiliation: Andrew M. Ryan is an associate professor in the Department of Health Management and Policy and the Institute for Healthcare Policy and Innovation, both at the University of Michigan.
authors.forename: Andrew M
authors.initials: AM
authors.lastname: Ryan
authors.affiliation: John D. Birkmeyer is executive vice president of the Dartmouth-Hitchcock Health System, in Hanover, New Hampshire.
authors.forename: John D
authors.initials: JD
authors.lastname: Birkmeyer
authors.affiliation: Lena M. Chen is an assistant professor in the Department of Internal Medicine and the Institute for Healthcare Policy and Innovation, both at the University of Michigan, and a physician at the Veterans Affairs Ann Arbor Healthcare System, in Michigan.
authors.forename: Lena M
authors.initials: LM
authors.lastname: Chen
mesh_terms: D006761:Hospitals; D006801:Humans; D006278:Medicare / Q000191:economics* / Q000592:standards*; D011785:Quality Assurance, Health Care / Q000191:economics / Q000592:standards*; D014481:United States; D062505:Value-Based Purchasing / Q000706:statistics & numerical data*
keywords: Health Reform; Health Spending; Medicare; Quality Of Care