A study of over 4500 hospitals core measures performance was completed to determine the financial impact of Value Based Purchasing on reimbursement. The study used the latest ranking mechanism in legislation proposals. The VBP incentive structure and mechanisms were modeled, and hospitals core measures performance were used to create the ranking. Findings show that most providers are confronted with the prospect of reduced Medicare reimbursement under VBP.

VBP is a key element of healthcare all active reform proposals and has been part of the healthcare landscape in demonstration for years. The current state of VBP and the associated strategic and operational considerations for providers will be presented. The presentation will reflect up-to-date proposals, enacted laws, and roll-out, at the time of presentation.

The following will be included in the presentation:

Data:
Analysis of national hospital performance data shows that most providers are confronted with the prospect of reimbursement cuts under VBP. An overview of these data will be presented with examples (appropriately anonymized).

VBP Structure and Mechanisms:
VBP has a basic incentive structure and mechanisms in hospitals will be discussed. The relative weights of AMI, CHF, Pulmonary, Surgical Site, and HCAHPS scores used to come up with the ranking will be discussed. Also, how the incentives for providers to improve care delivery processes are connected with specific measures of quality and process outcomes will also be described.

Methods for Assessing VBP Revenue Risk:
VBP revenue risk is based on rank order performance on a national level. Because relative performance on a small number of core measures will have a disproportionate impact on overall ranking and ranking-related financial rewards or penalties, high-potential measures will be discussed. The use of benchmarks, indicators, and methods for finding high potential improvement areas will be described.

Methods for Reducing Revenue Risk:
Attendees will learn how VBP reimbursement risk can be minimized by reducing healthcare delivery process variance. Furthermore, the indicators, and sources of process variance within high potential improvement areas will be described, e.g. departmental process variance, versus enterprise process variance.

A Framework for Prioritizing Action:
How to prioritize action and affect change will be discussed, and attendees will receive a framework for enacting needed changes in these areas: the COF framework.
The COF framework balances Clinical Utility, Operational Efficiency, and Financial Performance considerations when seeking improvements. This framework integrates the goals of an improvement plan with the actors who will implement the plan.

Implications of the Framework:
The implications of the COF framework in addressing the internal and external stakeholder environments will be discussed. These include the following.

Internal Stakeholders:
How to use COF considerations in service line development and refinement, project evaluation, and organizational control and leadership. For example, developing a service line requires expanded clinical utility capabilities, as well as greater operational efficiency to the facility. This can translate into improved financial performance and relative rank if performance in the associated measures is possible. Staff satisfaction is improved with well defined roles in a service line, and productivity can consequently improve.

External Stakeholders:
How to use COF considerations in Marketing and positioning with consumers, Payer negotiations, and Physician relationship management. Demonstrating quality performance resulting from greater clinical utility, and operational efficiency is key to a value proposition in the marketplace. Patients and Payers (in addition to Medicare) financially reward superior quality performance.

Additional Considerations:
Variants of Pay-for-performance incentive contracts from private payers will be described. Also, potentially overlooked strategies to affect quality performance will be presented; examples include the use of quality performance measures as a component of physician credentialing.