The “Value” in Value Based Purchasing
Michael F. Parry, MD, FACP, FIDSA, FSHEA
Director of Infectious Diseases and Microbiology
Stamford Hospital
Disclosures
Dr Parry is a paid consultant of Ethicon, Inc.
Additional Disclosures
Research support from Glaxo
Consultant for Durata Pharmaceuticals
Agenda
• Changing healthcare landscape
• Affordable Care Act
• Impact of HAIs
• Using evidence-based solutions
• Next steps – fully aligning to “Goal Zero”
What is “value based purchasing”?
The Government’s Argument
• Healthcare is too expensive
• You can’t control healthcare costs so I will help
• Quality of healthcare needs to be improved
• I’m only going to pay for improved quality (which I will define)
• My goal is to pay less and get better quality
• Higher quality = Greater Value (i.e., value based purchasing)
Lower cost
Top Concerns of Hospital CEOs
Issue
2013
2012
2011
Financial challenges
2.4
2.5
2.5
Healthcare reform implementation
4.3
4.7
4.5
Governmental mandates
4.9
5.0
4.6
Patient safety and quality
4.9
4.4
4.6
Care for the uninsured
5.6
5.6
5.2
Patient satisfaction
5.9
5.6
5.6
Physician-hospital relations
6.0
5.8
5.3
Population health management
7.6
7.9
—
Technology
7.9
7.6
7.2
Personnel shortages
8.0
8.0
7.4
Creating an accountable care organization
8.6
8.6
8.4
Affordable Care Act
The third-party trademarks used herein are trademarks of their respective owners.
Changing Healthcare Landscape
Affordable Care
Act
• CMS readmission
penalties 3
• Non payment of
Healthcare Acquired
Conditions (HACs) 1
• Value-based
purchasing 2
Regulatory
Requirements
Provider Opportunities
in Changing Landscape
• Reportable quality
metrics 2,3,4
• Lower/eliminate
readmissions
• Measured patient
outcomes 2,4
• Eliminate healthcare
acquired infections
• Patient satisfaction
reporting 2,4
• Increase patient
satisfaction
• Evidence-based
medicine
practices/protocols
• Improve patient
outcomes
1 – Medicare Program: Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates; Payments for Graduate Medical Education in Certain Emergency Situations; Changes to Disclosure of
Physician Ownership in Hospitals and Physician Self-Referral Rules; Updates to the Long-Term Care Prospective Payment System; Updates to Prospective Payment System; Updates to Certain IPPS-Excluded Hospitals;
and Collection of Information Regarding Financial Relationship Between Hospitals; Final Rule, Federal Register, Volume 73, Volume 161, Tuesday, August, 19, 2008.
2 – Medicare Program: Hospital Inpatient Value-Based Purchasing Program, Federal Register, Volume 76, Number 88, Friday, May 6, 2011.
3 - Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and FY2012 Rates; Hospitals’ FTE Resident Caps for
Graduate Medical Education Payment, Federal Register, Volume 76, Number 160, Thursday, August 18, 2011.
4 – Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations, Federal Register, Volume 76, Number 212, Wednesday, November, 2, 2011.
The Affordable Care Act
1. Readmission Reduction Program
The Advisory Board Company, Healthcare Industry Committee. Hospital Readmissions Reduction Program. C-Suite Cheat Sheet Series. August 2013.
The Affordable Care Act
2. (HAC) Hospital Acquired Condition
Program
• Set to start in FY 2015, the (HAC) Reduction Program is another
pay for performance initiative under the Affordable Care Act
• The HAC Reduction Program will work in tandem with the Value Based
Purchasing Program (VBP) and Readmissions Reduction Program to
incentivize higher quality hospital care at a lower cost
• CMS has created a list of reasonably preventable HACs including:
– Foreign objects retained after surgery
– Air embolisms
– Blood incompatibility
– Pressure ulcers, falls/trauma
– Manifestations of poor glycemic control
– Infections
– Thrombosis
The Advisory Board Company, Healthcare Industry Committee. Hospital-Acquired Condition
Reduction Program. C-Suite Cheat Sheet Series. August 2013.
The Affordable Care Act
2. Hospital Acquired Condition (HAC)
Program
• The HAC penalty will be enforced after
a hospital’s Value Based Purchasing and
Readmissions Reduction adjustments
are made and could decrease all
inpatient payments by 1% for an
institution
• In FY 2015, the HAC Reduction Program
will rank hospitals based on their HAC
rates, and those in the top 25% for HAC
rates will receive a 1% reduction in their
overall Medicare reimbursement rate
• Hospitals will be judged on their
performance in two domains
The Advisory Board Company, Healthcare Industry Committee. Hospital-Acquired Condition
Reduction Program. C-Suite Cheat Sheet Series. August 2013.
Upcoming Changes to HAC Program
Metric
FY2015
FY 2016
FY 2017
CLABSI
✓
✓
✓
CAUTI
✓
✓
✓
✓
✓
✓
✓
SSI – Colon
SSI –
Abdominal
Hysterectomy
MRSA
✓
C. Difficle
✓
The Affordable Care Act
2. Hospital Acquired Condition (HAC)
Program
Domain 1
Domain 2
(AHRQ Measure)
(CDCMeasure)
Weighted 35%
Weighted 65%
AHRQ PSI-90 Composite
2015 (2 measures):
This measure consists of:
CAUTI
CLABSI
PSI-3:
PSI-6:
PSI-7:
PSI-8:
PSI-12:
PSI-13:
PSI-14:
PSI-15:
pressure ulcer
latrogenic pneumothorax
central venous catheter-related
blood stream infection rate
hip fracture rate
postoperative PE/DVT rate
sepsis rate
wound dehiscence rate
accidental puncture
2016 (1 additional measure):
Surgical Site Infection (Colon Surgery
and Abdominal Hysterectomy
2017 (2 additional measures):
MRSA
C Diff
Association of American Medical Colleges presentation. https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-18956. Accessed February 2014.
The Affordable Care Act
3. Value Based Purchasing
As part of the Affordable Care Act, congress has authorized
the inpatient Value Based Purchasing Program, which
provides a data reporting infrastructure for hospitals to help
ensure quality patient outcomes
• CMS will implement Value Based Purchasing to
Inpatient Prospective Payment System which
affects 3,500 hospitals, representing largest
share of Medicare spending
• Hospitals will pay a percent withholding on the
front end and will either earn money back, lose
percent paid in, or earn additional dollars
• Funding of Value Based Purchasing program
will be through the reduction of hospitals DRG
payments for each discharged (Inpatient
Protective Payment System)
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-basedpurchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013
Fiscal Year
MS-DRG Operating
Payment Reduction
FY 2013
1%
FY 2014
1.25%
FY 2015
1.50%
FY 2016
1.75%
FY 2017
and Beyond
2%
The Affordable Care Act
How Does Value Based Purchasing Impact You?
Unlike the HAC and RR Program, VBP is budget neutral,
CMS will not keep any portion of the percent withheld nationally
CMS redistributes the percent withheld
across hospitals with highest achievement
• Redistribution is based on performance
• Best performers win others break even or lose
So what does
that mean?
Your hospital’s 1-2% could be redistributed to other
hospitals with better performance, or you could
receive other underperforming hospital’s 1-2%
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-basedpurchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013
The Affordable Care Act
Value Based Purchasing Scoring
Improvement (self)
• Hospitals will be assessed on how much
their current performance changes from
their own baseline period performance
• Points will be awarded based on how much
distance they cover between that baseline
and the benchmark score
VS
Total Performance
Score (TPS)
VS
• TPS calculated by
combining the greater of
the hospital’s achievement
or improvement points on
each measure to
determine a score for each
domain, multiplying each
domain score by the
proposed domain weight
and adding the weighted
scores together
Achievement (others)
• Hospitals measured based on how much
their current performance differs from all
other hospitals’ baseline period
performance
• Points will be awarded based on hospital’s
performance compared to threshold and
benchmark scores for all hospitals
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-basedpurchasing/index.html?redirect=/hospital-value-based-purchasing/ Accessed on April 26, 2013
The Affordable Care Act
Value Based Purchasing Domains
Eric Fontana, “The Future of Value Based Purchasing” Advisory Board Webinar http://www.advisory.com/Research/Physician-ExecutiveCouncil/Events/Webconferences/2013/The-Future-of-Value-Based-Purchasing May 23, 2013
The Affordable Care Act
Value Based Purchasing – Clinical Process Domain
Eric Fontana, “The Future of Value Based Purchasing” Advisory Board Webinar http://www.advisory.com/Research/Physician-ExecutiveCouncil/Events/Webconferences/2013/The-Future-of-Value-Based-Purchasing May 23, 2013
The Affordable Care Act
Value Based Purchasing – Patient Experience Domain
HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems)
• Composite Topics
– Nurse Communication (Question 1, Q2, Q3)
– Doctor Communication (Q5, Q6, Q7)
– Responsiveness of Hospital Staff (Q4, Q11)
– Pain Management (Q13, Q14)
– Communication About Medicines (Q16, Q17)
– Discharge Information (Q19, Q20)
• Individual Items
– Cleanliness of Hospital Environment (Q8)
– Quietness of Hospital Environment (Q9)
• Global Items
– Overall Rating of Hospital (Q21)
– Willingness to Recommend Hospital (Q22)
Eric Fontana, “The Future of Value Based Purchasing” Advisory Board Webinar http://www.advisory.com/Research/Physician-ExecutiveCouncil/Events/Webconferences/2013/The-Future-of-Value-Based-Purchasing May 23, 2013
The Affordable Care Act
Value Based Purchasing – Outcomes Domain
Patient Safety for Selected Indicators (Composite)
PSI 03 – Pressure Ulcer Rate
PSI 06 – Iatrogenic Pneumothorax Rate
PSI 07 – Central Venous Catheter-Related Bloodstream Infection Rate
PSI 08 – Postoperative Hip Fracture Rate
PSI 12 – Postoperative Pulmonary Embolism or Deep Vein Thrombosis Rate
PSI 13 – Postoperative Sepsis Rate
PSI 14 – Postoperative Wound Dehiscence Rate
PSI 15 – Accidental Puncture or Laceration Rate
https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/HospVBP_FY15_NPC_Final_03052013_508.pdf Accessed February 2014.
The Affordable Care Act
Value Based Purchasing – Efficiency Domain
Medicare Spending per Beneficiary
• An MSPB Episode includes all Part A and Part B claims between 3
days prior to index admission to 30 days after the hospital discharge
• Claim inclusion in episode based on from date (or admission date
for inpatient claims)
• By 2016 this one measure will account for 25% of all Value Based
Purchasing Dollars
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/NPC-MSPB-09Feb12-Final508.pdf Accessed February 2014.
The Affordable Care Act
Value Based Purchasing – Efficiency Domain
Avg Spending Per Avg Spending Per Avg Spending Per
Hospital Name
State
Period
Claim Type
Episode (Hospital) Episode (State) Episode (Nation)
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Home Health Agency
$11.00
$14.00
$13.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Hospice
$4.00
$2.00
$1.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Inpatient
$9.00
$5.00
$5.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Outpatient
$71.00
$51.00
$63.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Skilled Nursing Facility
$1.00
$2.00
$2.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Durable Medical Equipment
$11.00
$10.00
$10.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 to 3 days Prior to Index Hospital Admission
Carrier
$160.00
$145.00
$162.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Home Health Agency
$0.00
$0.00
$0.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Hospice
$0.00
$0.00
$0.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Inpatient
$8872.00
$8294.00
$8534.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Outpatient
$0.00
$0.00
$0.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Skilled Nursing Facility
$0.00
$0.00
$0.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Durable Medical Equipment
$36.00
$32.00
$25.00
SOUTHEAST ALABAMA MEDICAL CENTER AL During Index Hospital Admission
Carrier
$1850.00
$1735.00
$1840.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Home Health Agency
$925.00
$862.00
$733.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Hospice
$143.00
$154.00
$119.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Inpatient
$3170.00
$2485.00
$2532.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Outpatient
$616.00
$536.00
$624.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Skilled Nursing Facility
$1775.00
$2243.00
$2924.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Durable Medical Equipment
$123.00
$133.00
$112.00
SOUTHEAST ALABAMA MEDICAL CENTER AL 1 through 30 days After Discharge from Index Hospi Carrier
$884.00
$920.00
$1005.00
SOUTHEAST ALABAMA MEDICAL CENTER AL Complete Episode
Total
$18663.00
$17622.00
$18704.00
The Future of VBP Domains
FY 2015
FY 2014
25%
20%
20%
45%
30%
Clinical Process of Care
30%
Patient Experience of Care
30%
Outcome Domain
Efficiency
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/index.html?redirect=/hospital-valuebased-purchasing/ Accessed on April 26, 2013
The Affordable Care Act
Value Based Purchasing Timeline
FY 2016 Value Based
Purchasing Domains
Baseline Period
Performance
Period
Clinical Process
of Care
Jan. 1, 2012 –
Dec. 31, 2012
Jan. 1, 2014 –
Dec. 31, 2014
Patient Experience
of Care
Jan. 1, 2012 –
Dec. 31, 2012
Jan. 1, 2014 –
Dec. 31, 2014
Outcome: Mortality
Oct. 1, 2010 –
June 30, 2011
Oct. 1, 2012 –
June 30, 2014
Outcome: AHRQ PSI-90
Oct. 15, 2010 –
June 30, 2011
Oct. 15, 2012 –
June 30, 2014
Outcome: CAUTI /
CLABSI/ SSI
Jan. 1, 2012 –
Dec. 31, 2012
Jan. 1, 2014 –
Dec. 31, 2014
Efficiency
Jan. 1, 2012 –
Dec. 31, 2012
Jan. 1, 2014 –
Dec. 31, 2014
Clinical process gives way to outcomes and efficiency over time
as the model becomes more Pay for Performance
The Advisory Board Company, Healthcare Industry Committee. Hospital Value-Based Purchasing. C-Suite Cheat Sheet Series. August 2013.
Percent of CMS Dollars at Stake by FY 2017
Value Based
Purchasing
Readmission
Reduction
Program
Healthcare Acquired
Condition Program
2%
3%
1%
The Advisory Board Company, Healthcare Industry Committee. Hospital Value-Based Purchasing. C-Suite Cheat Sheet Series. August 2013.
The Advisory Board Company, Healthcare Industry Committee. Hospital Readmissions Reduction Program. C-Suite Cheat Sheet Series. August 2013.
The Advisory Board Company, Healthcare Industry Committee. Hospital-Acquired Condition Reduction Program. C-Suite Cheat Sheet Series. August 2013.
CLABSI Impact
The third-party trademarks used herein are trademarks of their respective owners.
8 Ways CLABSIs Can Impact Reimbursement
1.
In 2008 CMS stopped payment of 10 hospital acquired conditions
including VASCULAR CATHETER RELATED INFECTIONS
2.
2015 HAC Program: Domain 1 – PSI 90
3.
2015 HAC Program: Domain 2 – CLABSI
4.
VBP: Outcomes Domain (VBP)-CLABSI specific line item
5.
VBP: Outcomes Domain (VBP)-CLABSI is one of 8 items making up
composite score for PSI-90 which is a subset of VBP outcomes domain
6.
VBP: Efficiency Domain (VBP)-CLASBI can potentially elevate Medicare
spending per beneficiary
7.
VBP: Potential Impact to Patient Satisfaction
8.
Readmission Program
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/downloads/HACFactSheet.pdf
Your CLABSI Data and Outcome Measures
Hospital Compare
Joint Commission
National Patient Safety Goal #7
Hospitals implement policies and
practices aimed at reducing the risk
of central line-associated bloodstream
infections that meet regulatory
requirements and are aligned with
evidence-based standards
The Joint Commission: Comprehensive Accreditation Manual for Hospitals: The Official Handbook. Oak Brook, IL: Joint Commission Resources, 2011
Getting to Zero
The third-party trademarks used herein are trademarks of their respective owners.
2011 CDC Guidelines
• Intended to provide evidence-based
recommendations for preventing
intravascular catheter-related
infections
• 5 major areas of emphasis:
1. Education of healthcare professionals
2. Use maximal sterile precautions (MSP)
3. Use of CHG skin prep
4. Site selection and avoiding routine replacement
5. Use antiseptic/antibiotic impregnated catheters
and CHG impregnated sponge dressing
(If rate of infection not decreasing despite
adherence to above 4 strategies)
6. Checklist
• Targets elimination of CRBSI
from all patient-care areas
CHG impregnated sponge dressings
received a Category 1B
recommendation for reducing
the risk of CLABSIs
• “strongly recommended for
implementation and supported by
some experimental, clinical, or
epidemiologic studies and a strong
theoretical rationale”
• CHG impregnated sponge dressings
are the only form of CHG dressing
recommended in new CDC guidelines
O’Grady NP, Alexander M, et al., Guidelines for the prevention of intravascular catheter-related
infections. Centers for Disease Control and Prevention. MMWR Recomm Rep 2011 April 1.
-
“No recommendation is made for other
types of chlorhexidine dressings (Unresolved Issue)”
Next Steps – “Goal Zero”
CDC – Target elimination of CLABSIs from all patient-care areas
Dialysis
Patients
Peripheral IV
Lines
Surgical
Drains
Staff Compliance
= Kits
CVC Lines
&
PICC Lines
Home
Infusion
Arterial
Lines
LVADs
Readmission
Rates
1 – Medicare Program: Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates; Payments for Graduate Medical Education in Certain Emergency Situations; Changes to Disclosure of
Physician Ownership in Hospitals and Physician Self-Referral Rules; Updates to the Long-Term Care Prospective Payment System; Updates to Prospective Payment System; Updates to Certain IPPS-Excluded Hospitals; and
Collection of Information Regarding Financial Relationship Between Hospitals; Final Rule, Federal Register, Volume 73, Volume 161, Tuesday, August, 19, 2008.
2 – Medicare Program: Hospital Inpatient Value-Based Purchasing Program, Federal Register, Volume 76, Number 88, Friday, May 6, 2011.
3 - Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and FY2012 Rates; Hospitals’ FTE Resident Caps for Graduate
Medical Education Payment, Federal Register, Volume 76, Number 160, Thursday, August 18, 2011.
4 – Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations, Federal Register, Volume 76, Number 212, Wednesday, November, 2, 2011.
Conclusion
The Patient Protection & Affordable Care Act is predicated on
IMPROVING, more specifically continually IMPROVING PATIENT
SATISFACTION and continually IMPROVING OUTCOMES over
time. The hospitals that can achieve that going forward will be the
most successful.
Questions?
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