Value-Based Purchasing Programs Tougher for Academic Hospitals

Christopher Stanley in Modern Healthcare

Academic medical centers are penalized more under the CMS' various value-based purchasing programs than community hospitals, according to a new report

The study, published Wednesday by the consultancy Guidehouse, found 24% of academic medical centers received penalties for their performance on three of the CMS' value-based payment programs in fiscal 2018, while 13.7% of community hospitals received the same number of penalties.

Additionally, 9.4% of community hospitals didn't receive a penalty on any of the CMS programs, while just 1.7% of academic medical centers weren't penalized. The three programs referred to are the Hospital-Acquired Condition Reduction Program, the Hospital Readmissions Reduction Program, and the Hospital Value-Based Purchasing Program.

The stakes are high for academic medical centers to do well in value-based purchasing programs as the movement toward value continues, said Dr. Christopher Stanley, co-author of the study and director in Guidehouse's Healthcare practice. Although academic medical centers provide vital tertiary care unmatched by community hospitals, Guidehouse found that as much as 90% of their admissions and procedures can be performed at community hospitals. Their ability to compete in the healthcare marketplace will likely depend in some part on their ability to perform as well as their community hospital peers on outcomes and costs.

"I think it raises the stakes — it broadens the competitor pool and academic medical centers have to figure out how to have an operating cost structure where they can compete," Stanley said.

The study broke down how academic medical centers and community hospitals perform on the three CMS programs. Academic medical centers overall showed improvement in the programs, but still lagged behind community hospitals. For instance, the study found overall weighted quality scores for academic medical centers on the three CMS programs increased significantly from 42.2 in 2016 to 46.6 in 2018, but still had lower scores than community hospitals, which had an overall weighted score of 47.9 in 2018.

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