Pursuing value

Dr. Elizabeth Mort has kept close tabs on a frail, elderly patient with congestive heart failure since the patient was released from Partners HealthCare System's Massachusetts General Hospital in August.

After a short stint in rehabilitation, the patient went home—but Partners went with her. The patient uploads to Partners information on her vital signs via an electronic monitor in her home. Nurses, who have received specialized training in congestive heart failure, also provide care in the patient's home.

“Yesterday, I got an e-mail from the home-care nurse saying that my patient with heart failure's weight went up 5 pounds. She let me know that she was going to institute the protocol that we have to give (the patient) an extra dose of Lasix” to reduce excess fluid, recalled Mort, who also is senior medical director at Partners and vice president of quality and safety at Massachusetts General in Boston.

Telemonitoring and home care help physicians at Massachusetts General manage the transition from hospital to home for patients with congestive heart failure and is part of a strategy to help prevent inpatient readmissions and deaths.

But Massachusetts General—one of the 100 Top Hospitals on Thomson Reuters' latest list—like hospitals across the country, is redoubling its efforts to improve patient care, honing in specifically on those quality metrics—such as the 30-day mortality rate for congestive heart failure—included in Medicare's new value-based purchasing program.

The CMS issued final rules this spring for the first year of value-based purchasing—a pay-for-performance initiative that begins in fiscal 2013. For the second year of the program, some details have been completed while others are in proposed form.

For the first year of the program, the incentive payments hospitals earn will apply to Medicare discharges that occur on or after Oct. 1, 2012—the first day of fiscal 2013. However, hospitals that qualify for incentive payments will not begin to receive them until January 2013 because the CMS needs time to upload the appropriate data into its claims processing system.

“Like everyone, we are making sure we are aware of the exact details in the final rule. The revenue people are estimating the dollars associated with it, and the quality people are looking at the quality indicators and saying, ‘This one we have got covered. This one we have to put a bit more focus on,' ” Mort says.

The hospital industry has struggled to keep abreast of a flurry of rulemaking activity this year on value-based purchasing. In addition to proposed and final rules for the value-based purchasing program specifically, the CMS also has tucked additional details about the program into proposed inpatient and outpatient rules for the prospective payment system.

In a 14-page comment letter dated Aug. 29, the American Hospital Association took issue with this approach to the notice and comment period. “It has been very difficult to track all the moving pieces associated with this regulation,” according to the letter.

To pay for the value-based purchasing program, which is budget-neutral, the CMS plans to cut money from hospitals' base operating DRG payments, gradually increasing the size of the cut from 1% in fiscal 2013 to 2% in fiscal 2017 and beyond.

The 2% cut slated for 2017 translates into about four-tenths of a percentage point of the average hospital's margin, according to the Healthcare Financial Management Association. “It doesn't sound like a lot, but when you think that the average hospital's margin is somewhere around 3%, and you suddenly have a margin of 2.5%, that could have some real impact on hospitals, particularly when the credit-rating agencies start to limit access to capital. All kinds of unpleasant things happen when your margin starts to slip,” says Chad Mulvany, technical director at the HFMA.

Value-based purchasing is just a portion of the Medicare revenue at stake through a variety of initiatives to drive quality improvement at U.S. hospitals. The AHA estimates that about 10% of Medicare revenue will be at risk in 2017 as a result of:

• Value-based purchasing.
  • Penalties for high rates of readmissions and hospital-acquired conditions.
  • Incentives for participation in the inpatient quality-reporting program.
  • Incentive payments tied to achieving meaningful-use standards in the use of electronic health-record systems.
  In the value-based purchasing program specifically, the CMS will evaluate hospitals' performance on a variety of weighted measures within a number of quality domains. The measures will be rolled up into a total performance score for each hospital, which will then be compared to the scores of all other hospitals nationally. Top scorers will be rewarded and low scorers will be penalized.

  In the first year of the program, for example, “the worst performers will lose 1%. The ones in the middle will earn their 1% back, and the ones that are above the middle will earn their 1% back plus a portion of the pool,” says Joseph Becht, director in the healthcare provider practice at Deloitte & Touche's Richmond, Va. office.

  The structure “has been very eye-opening to a lot of people because we are not used to being compared that way,” says Jeff Costello, chief financial officer at Memorial Hospital & Health System, South Bend, Ind., another organization on the 100 Top Hospitals list. “This is a competitive structure and our competition is the entire country. It doesn't matter if you are a 100-bed hospital, a 300- to 400-bed hospital in the Midwest or a 1,000-bed teaching hospital out East.”

Because value-based purchasing is structured with winners and losers, hospitals may find it difficult to move up in the relative standings once they are among the poorest performers. “I think of it as a penalty box. It will be hard to move out of there. You would have to make huge strides in your performance while also having a better performing hospital start to perform more poorly,” says Auburn Daily, principal counsel in health law at the University of California's office of general counsel.

Nancy Foster, vice president of quality and patient safety at the AHA, says, “By decreasing their payments you may, in fact, take away the very resources that are needed in order for them to improve their performance. We are greatly concerned that hospitals could get into a downward spiral.”

In the program's first year, 70% of a hospital's total performance score is based on 12 clinical process-of-care measures involved in treating heart attack, heart failure and pneumonia as well as other measures designed to reduce infections and complications from surgery. The remaining 30% of the total performance score is based on eight patient-satisfaction measures derived from the Hospital Consumer Assessment of Healthcare Providers and Systems Survey.

While performance in 2013 will be measured on just two domains—processes of care and HCAHPS—the CMS plans to add more measures and domains in future years. In the second year of the program, the CMS has finalized three condition-specific mortality measures, eight hospital-acquired condition measures and composite measures for patient safety and mortality.

Although the measure is still in proposed form, the agency has said it also plans to add a domain for efficiency based on spending per Medicare patient. Proposed weighting for fiscal 2014 is: 30% HCAHPS, 30% outcomes, 20% efficiency and 20% process of care.

In its Aug. 29 letter, the AHA also expressed concern with the way in which the CMS added the new measures for efficiency, hospital-acquired conditions and the composites of safety and mortality. The AHA asserted that the CMS failed to meet requirements spelled out in the health reform law because the CMS did not post the measures on the federal Hospital Compare website before adding them to the value-based purchasing program.

The CMS has also said it plans to drop measures in subsequent years once they “top out,” meaning that the average score for all hospitals is near the top, making comparisons among hospitals' scores useless.

The process through which total performance scores will be calculated is complex. In the first year of the program, each of the 12 clinical process-of-care measures will be scored on a 10-point scale. Hospitals will earn points for achievement and improvement. The achievement score is based on a comparison of a hospital's score to a threshold—the minimum level of performance required to earn points—and a benchmark—representing high scores achieved nationally during a baseline period. The improvement score compares a hospital's performance during an achievement period to its score during a baseline period. The CMS will use the higher of the achievement and improvement scores in the tally for each process measure.

Scoring for HCAHPS is similar but hospitals also can earn up to 20 additional points for consistency. In calculating the total performance score, the CMS will exclude any process-of-care measure for which the hospital has fewer than 10 cases. Hospitals that do not qualify for at least four of the process-of-care measures will be excluded from the value-based purchasing program. Hospitals with fewer than 100 HCAHPS surveys during the performance period also will be excluded from the program.

The HFMA's Mulvany worries that the 10-case minimum to be scored on a process-of-care measure is too few, putting small hospitals at a disadvantage. “If you have a random anomaly, it could end up being a significant strike against you. For a larger hospital, the random anomaly washes out.” For 2013, the performance period began July 1 and will end March 31, 2012. The baseline period ran from July 1, 2009, to Dec. 31, 2009.

The performance period also began July 1 for the three outcome measures to be added in 2014—30-day mortality rates for heart attack, heart failure and pneumonia. The performance period for these measures will end on June 30, 2012; the baseline period ran from July 1, 2009, to June 30, 2010.

Other baseline and performance periods for 2014 have been proposed but not finalized. The CMS has proposed a baseline period of April 1, 2010, through Dec. 31, 2010, and a performance period of April 1, 2012, through Dec. 31, 2012, for both the process-of-care and HCAHPS measures. For the hospital-acquired conditions and composite measures of complications/patient safety and mortality, the proposed baseline period would run from March 3, 2010, through Sept. 30, 2010, and the performance period would run from March 3, 2012, through Sept. 30, 2012.

Given the complexity of the value-based purchasing program and the number of details in proposed form, Daily says she believes hospital executives should first focus their efforts on the process-of-care measures. “I am inclined, because this is already upon us, to dedicating some resources to dealing with the known quantity and making strides if there are strides to be made.”

At least some hospital executives agree with her and are driving their organizations to achieve scores of 100% on all 12 process measures included in 2013. Moving toward perfection on the process measures is important because the average scores nationally on each of these measures are already quite high. Of the 12 measures, the CMS set benchmark scores for six of them at 1.0.

“If you are already at a high level of excellence, the challenge is to maintain it. You know that all hospitals are going to get up to the top of the mountain eventually—that is kind of the way these process measures are,” Mort says.

At Memorial Health, employees who have a direct effect on the process-of-care measures have to be schooled in what the measures are and how they apply to their daily routines. Costello says it is important that “there isn't any lack of clarity about what has to occur for the patient and there isn't any lack of clarity about what has to be documented in the record to make sure we are getting credited for everything. It is one of those kinds of things where we weren't intentionally not doing something, but the expectation wasn't that it would happen 100% of the time and now it is.”

At Robert Packer Hospital in Sayre, Pa., another 100 Top Hospitals facility, performance-improvement teams have not only focused on the process measures but also outcome measures to be included in value-based purchasing in fiscal 2014. “We are looking deeper at how we hard-wire consistent performance in pneumonia, urinary catheters and heart failure,” says Marie Droege, president of Robert Packer. It isn't a static process; best practices are refined continually as new evidence about what works becomes available, Droege adds.

For example, a multidisciplinary process-improvement team was assembled in November 2009 to create a set of best practices to prevent catheter-associated urinary tract infections. The best practices help physicians determine which patients need an indwelling urinary catheter, which remains in the patient for a period of time.

Sometimes all that is needed is a straight catheter, which is used only long enough to empty the bladder once. For example, a surgical patient may tell a nurse that he or she feels the need to urinate but isn't ready to get out of bed and use the bathroom.

“The risk of infection really lies in putting a catheter in and leaving it in,” says Bonnie Onofre, chief nursing officer at Robert Packer.

To help determine which patients really need a catheter of any kind, the hospital in January 2010 purchased portable ultrasound bladder scanners, which measure precisely how much urine is in the bladder. If there is only a small amount of urine in the bladder, the patient may not need the catheter, Onofre says.

In September 2010, the process-improvement team added a new requirement to the program to encourage the fast removal of the indwelling urinary catheters. During each shift, nurses now document in the electronic record the reason why a urinary catheter was not removed.

As a result of the new processes, the rate of catheter-associated urinary tract infections dropped from 3.31 per 1,000 indwelling catheter days in July 2009 to zero as of December 2010.

Like Robert Packer, Ochsner Health System, New Orleans, also has been focused on improving outcomes, including the reduction of hospital-acquired conditions.

One example: a foreign object left in the patient after surgery. “It is a very uncommon event but it is one of those things you want to be a never event,” says Dr. Joseph Bisordi, executive vice president and chief medical officer of Ochsner, another organization on the 100 Top Hospitals list.

To prevent such an occurrence, surgical teams at Ochsner count sponges as they use them and then count again when they remove the sponges. “It has gotten us to a certain level of reliability but not to the level of reliability that we want,” Bisordi says.

That is why Ochsner plans to purchase new technology. Over the next few months, Ochsner will deploy an automated system to track surgical sponges at each of its hospitals The system embeds a unique data matrix bar code on each sponge, giving each sponge a unique identifier so it can be counted electronically both during and after surgery using a small scanner device.

Similar clinical teams at Ochsner are evaluating clinical processes related to the other hospital-acquired condition measures included in the second year of value-based purchasing. “We have been looking at this for a while, but this has put some new energy behind focusing on it,” Bisordi says.

He suspects that other hospitals have reacted to the rules in a similar way, improving Medicare outcomes nationally. “When you think about value-based purchasing and a focus on outcomes, I think it will focus all of us on moving on the outcomes that matter most to people,” Bisordi says.