Hospital value-based payment programs and disparity in the United States: A review of current evidence and future perspectives

Abstract

Beginning in the early 2010s, an array of Value-Based Purchasing (VBP) programs has been developed in the United States (U.S.) to contain costs and improve health care quality. Despite documented successes in these efforts in some instances, there have been growing concerns about the programs' unintended consequences for health care disparities due to their built-in biases against health care organizations that serve a disproportionate share of disadvantaged patient populations. We explore the effects of three Medicare hospital VBP programs on health and health care disparities in the U.S. by reviewing their designs, implementation history, and evidence on health care disparities. The available empirical evidence thus far suggests varied impacts of hospital VBP programs on health care disparities. Most of the reviewed studies in this paper demonstrate that hospital VBP programs have the tendency to exacerbate health care disparities, while a few others found evidence of little or no worsening impacts on disparities. We discuss several policy options and recommendations which include various reform approaches and specific programs ranging from those addressing upstream structural barriers to health care access, to health care delivery strategies that target service utilization and health outcomes of vulnerable populations under the VBP programs. Future studies are needed to produce more explicit, conclusive, and consistent evidence on the impacts of hospital VBP programs on disparities.

Overlooked and Damaging Impact of Structural Racism and Implicit Bias on US Health Care

“…41 However, accountability for expenditures with respect to provider reimbursement, quality, or addressing inequities is complex and lacking. 42 The American safety net system, including federally qualified health centers, and other disproportionate share hospitals are both subsidized by government funding and paid for uncompensated care. As previously mentioned, in Medicaid and Medicare, reimbursement is at an all-time low, compared with cost, driving providers in the most underserved communities out of participating.…”

“…With nearly 55% of Americans covered by private health insurance, through employers and the marketplace, the US health care system is still heavily reliant on the private sector for financing of and reimbursement to providers 41 . However, accountability for expenditures with respect to provider reimbursement, quality, or addressing inequities is complex and lacking 42 . The American safety net system, including federally qualified health centers, and other disproportionate share hospitals are both subsidized by government funding and paid for uncompensated care.…”

Medicare Overall Hospital Star Rating and Value Based Purchasing: What You Need to Know

“…A penalty is imposed on hospitals with a predicted-to-expected readmission ratio larger than 1, whereas those with 1 or less are not penalized. 7 The penalty was initially limited to 1% of Diagnosis-Related Group payments. Then, the payment limit increased to 2% in 2014 and 3% in 2015, in which CMS caps penalties at 3%.…”

“…7 In the HACRP implemented in 2014, the worst-performing quartile of hospitals receives a penalty of 1% of Medicare revenues. 7 The 6 quality measures CMS uses for the total hospital-acquired condition score are as follows 7 :…”

“…The HRRP enacted in 2012 assesses the quality of outcomes (predicted to expected readmissions) for these conditions: heart failure, pneumonia, acute myocardial infarction, chronic obstructive pulmonary disease, elective primary total hip arthroplasty and/or total knee arthroplasty, and coronary artery bypass graft surgery. A penalty is imposed on hospitals with a predicted-to-expected readmission ratio larger than 1, whereas those with 1 or less are not penalized 7 . The penalty was initially limited to 1% of Diagnosis-Related Group payments.…”