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Reform Update: Some question the value of value-based purchasing


By Sabriya Rice
Posted: August 11, 2014 - 4:30 pm ET
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Story updated at 7 p.m. ET

Next year, U.S. healthcare providers will be subject to Medicare penalties if they do not meet up to 26 measures for value-based purchasing. As physicians wait to see if their payments will be docked or boosted based on how they rank, health policy researchers are continuing to raise questions about how the program works.

The methodology the CMS adopted may lead to distorted comparisons, perverse incentives and may not achieve the desired goals, they warn.

Value-based purchasing is part of the quality incentive program established through the Patient Protection and Affordable Care Act to help drive down costs while promoting high-quality care for Medicare beneficiaries.

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Though health policy experts commend efforts to address healthcare quality and costs, several recent reports question whether the incentives are well-suited to the goal. Simply measuring spending does not get at the complexity of patient care in the U.S. and may lead to disadvantages for patients needing higher amounts of care, some say. Others worry the measures may not be true reflections of quality.

In fiscal 2015, providers will be evaluated based on 26 measures. They include 12 clinical process-of-care measures (for example, whether surgical patients received venous thromboembolism preventive care); eight patient-experience dimensions (such as doctor and nurse communication); five outcome measures (including 30-day mortality rates for heart failure, pneumonia and heart attack); and one efficiency measure on spending per beneficiary.

“If a patient has a lot of complex problems, current methodologies could penalize physicians for getting involved in the care,” said Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, a Pittsburgh-based not-for-profit focused on the quality and affordability of U.S. healthcare services. The approach does not distinguish between an over-treated patient and one who legitimately needs more care. As a result, physicians may be penalized if they take on sicker patients, he said.

In a report released Monday from the CHQPR (PDF), Miller identified six areas of concern with current value-based purchasing methodology. One is that patients who lack a primary-care physician can cause distortion in comparisons of spending. Another is that a physician can easily be assigned accountability for services a patient received from another provider. Spending on a preventable condition such as a hospital-acquired infection may be assigned to the physician treating the condition rather than the one who caused it, according to the report.

“You can't find these distinctions by just the total spending. It's an easy thing to say let's add up all the spending, but it's harder to say, let's think about the sequence,” Miller said. Poorly designed measurement, attribution and accountability systems fail to provide the actionable information providers need and can discourage them from making feasible changes by demanding they control services and spending that are beyond their range of influence, the organization concludes in the report, which also makes suggestions to improve the framework.

The CMS responded that the program only holds providers accountable for the patients they have the greatest ability to direct and influence. The agency is continually looking for ways to improve, refine and address concerns in with value-based measures, a spokesperson said.

Others have questioned whether the measures are accurate reflections of quality. A measure for venous thromboembolism will be included in the 2015 CMS value-based purchasing program, for example, and it is also addressed in various other quality improvement and public reporting initiatives. However, research has called into question the validity of using it as a metric of hospital quality. Authors of a recent study published in JAMA found that high-quality hospitals tended to adhere tightly to VTE prevention protocols but still had higher rates of VTE.

“If we're going to venture into high-stakes territory, we need to do it with measures that are valid,” said the lead study's author, Dr. Karl Bilimoria, director of the surgical outcomes and quality improvement center at Northwestern University.

The concept of holding providers accountable through penalties might be good, but the CMS must be able to move quickly when new evidence suggests a measure does not have the intended impact. “If we don't have confidence in a measure, we should take it out,” he said.

A report from the RAND Corp. (PDF) this year found mixed results from a broad array of value-based purchasing arrangements with government programs and private insurers. Even those with strong methodological designs did not lead to significant improvements, according to the not-for-profit research organization. That study reviewed publicly available information on 129 value-based purchasing programs, including 91 pay-for-performance programs, 27 accountable care organizations and 11 bundled payment programs. The RAND analysts concluded that more research is needed to determine the programs' impact.

The value-based purchasing program is only in the beginning stages and will evolve over time, the CMS spokesperson said. The agency encourages stakeholders to review policy proposals and submit formal comments to further inform the process.

In the meantime, while the program may not be perfect, most agree the current Medicare fee-for-service environment is fragmented and that change is urgently needed.

“Cost is not something we can put on the back burner any longer. We have a system that is terrible,” said Dr. John Santa, medical director of Consumer Reports. Risk adjustment is complex and no process will ever be perfect, he says, but the key is getting started and moving in the direction of constructive change.

“If we waited until all of the various stakeholders thought any of this was perfect, we'd never do anything,” Santa said.

Follow Sabriya Rice on Twitter: @MHSRice


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