Value-Based PurchasingAs Value-Based Purchasing (VBP) continues to take hold, there are some important changes to the expectations and regulations that govern it in 2015.


What is Value-Based Purchasing?

If you need a quick refresher, Value-Based Purchasing is the incentive program that came along with the Affordable Care Act, which is hoping to help providers adjust to the move from fee-for-service models of pay to pay that is linked to quality rather than quantity of services. Under the VBP model providers and the organizations that they work for will be either docked Medicare payments for poor outcomes or awarded bonuses for striking a balance between high quality care and low cost. The hope is that VBP will inspire providers to become not just thriftier, but more innovative when it comes to providing care.


Criticisms of  Value-Based Purchasing

The major criticisms of the VBP currently are perhaps the most obvious of any plan that focuses on or supports any kind of standardization of patient care: the needs of patients are more complex than ever before because we are an aging population and the rate of comorbid conditions continues to rise. What this points to is that, while we may be able to standardize care across some diagnoses, there could be an infinite combination of them within a specific patient – and how you account for those variations is something that critics say has yet to be properly addressed in the VBP model. As it stands now, a provider could be asking for penalties just by taking on the care of a complex, chronically ill patient. This happens because, as it currently stands, there is no way to accurately discern between patients who have truly complex care requirements – and those who are being over-treated.


Other points to consider along these lines is that there is no mechanism to prevent a doctor treating a patient for a hospital-acquired infection, for instance, to be saddled with the penalty even though they were not involved in the patient’s care when they acquired it. Similar issues of accountability are bound to crop up with patients who lack a primary care provider.


2015 Value-Based Purchasing Measures – What’s Changed, What’s Stayed The Same.

For 2015, the number of measures taken into account by Medicare when considering penalties and bonuses for organizations will rise to 26 from last year’s 20. These measures include a mix of process, outcome and cost savings measures. The Studer Group reported a weight increase in outcome measures by 5%, an increase in efficiency by 20%, a decrease in clinical process by 25% and no change in weight for patient experience measures.


Breaking these down even further we can look at what constitutes those unchanged patient experience measures, in the form of HCAHPS, which still will account for 30% of the assessment. As you’ll recall, HCAHPS look at quality measures within an organization like communication between nurses and doctors, providers and patients, administration and providers, cleanliness and organization of a hospital, the quality and relevance of discharge information, etc. Similarly, process of care measures look for targeted clinical goals, like the administration of certain drugs within a certain time frame after a patient is admitted.


Outcome measures, which will see an increased focus in 2015, is perhaps what we most often associated with VBP when we engage in conversations about it: outcome measures like morbidity and mortality rates are no doubt some of the most important KPIs in healthcare, and will only continue to be as the move away from fee-for-service continues.


The Bottom Line?

As it stands, incentive payment for 2015 will rise to 1.50 % from 1.25% in 2014. The upward trend is set to continue each year through 2017, at which time it is set to top out a 2%.


Even though it’s too soon in VBP’s implementation to decide if it will solve the issues associated with fee-for-service and prove a profitable and sustainable alternative, most in the healthcare sector do agree that we need to move away from fee-for-service, it’s just a matter of determining what will replace it.