Medicare Beneficiaries’ Perspectives on the Quality of Hospital Care and Their Implications for Value-Based Payment

Abstract

ImportanceMedicare’s Hospital Value-Based Purchasing (HVBP) program adjusts hospital payments according to performance on 4 equally weighted quality domains: clinical outcomes, safety, patient experience, and efficiency. The assumption that performance on each domain is equally important may not reflect the preferences of Medicare beneficiaries.ObjectiveTo estimate the relative importance (ie, weight) of the 4 quality domains in the HVBP program from the perspective of Medicare beneficiaries and the impact of using beneficiary value weights on incentive payments for hospitals enrolled in fiscal year 2019.Design, Setting, and ParticipantsAn online survey was conducted in March 2022. A nationally representative sample of Medicare beneficiaries was recruited through Ipsos KnowledgePanel. Value weights were estimated using a discrete choice experiment that asked respondents to choose between 2 hospitals and indicate which they preferred. Hospitals were described using 6 attributes, including (1) clinical outcomes, (2) patient experience, (3) safety, (4) Medicare spending per patient, (5) distance, and (6) out-of-pocket cost. Data analysis was performed from April to November 2022.Main Outcomes and MeasuresAn effects-coded mixed logit regression model was used to estimate the relative importance of quality domains. HVBP program performance was linked to Medicare payment data in the Medicare Inpatient Hospitals by Provider and Service data set and hospital characteristics from the American Hospital Association Annual Survey data set, and the estimated impact of using beneficiary value weights on hospital payments was estimated.ResultsA total of 1025 Medicare beneficiaries (518 women [51%]; 879 individuals [86%] aged ≥65 years; 717 White individuals [70%]) responded to the survey. A hospital’s performance on clinical outcomes was most highly valued by beneficiaries (49%), followed by safety (22%), patient experience (21%), and efficiency (8%). Nearly twice as many hospitals would see a payment reduction when using beneficiary value weights than would see an increase (1830 vs 922 hospitals); however, the average net decrease was smaller (mean [SD], −$46 978 [$71 211]; median [IQR], −$24 628 [−$53 507 to −$9562]) than the comparable increase (mean [SD], $93 243 [$190 654]; median [IQR], $35 358 [$9906 to $97 348]). Hospitals seeing a net reduction with beneficiary value weights were more likely to be smaller, lower volume, nonteaching, and non–safety-net hospitals located in more deprived areas that served less complex patients.Conclusions and RelevanceThis survey study of Medicare beneficiaries found that current HVBP program value weights do not reflect beneficiary preferences, suggesting that the use of beneficiary value weights may exacerbate disparities by rewarding larger, high-volume hospitals.

What is a star worth to Medicare beneficiaries? A discrete choice experiment of hospital quality ratings

“…We previously described how understanding the relative importance of quality domains from beneficiaries (ie, in a representative sample) could be used to align the incentives within value-based payment programs with quality as defined by patients. 10 However, understanding the relative importance of quality domains also has implications for supporting patient choice. The 5-star ratings on the CMS's Care Compare website are often based on equally weighting the composite measures; however, different beneficiaries have different perspectives on quality.…”

“…We previously reported on the relative importance of different domains of hospital quality from the perspective of Medicare beneficiaries (eg, clinical outcomes vs patient experience) and the impact of using beneficiary preferences on value-based payment incentives. 10 Importantly, these data also provide insight into how Medicare beneficiaries trade off between different levels of quality (eg, 3-star vs 4-star ratings), cost, and distance, and can be used to estimate how much beneficiaries are willing to pay or how far they are willing to travel for higher rated hospitals.…”

“…Descriptive labels for the star ratings were taken from Medicare's patient-facing website and ranged from “poor” to “excellent” for clinical outcomes, patient experience, and safety, and from “much higher than average” to “much lower than average” for efficiency. 10 The use of stars was supported by our qualitative research, which included focus groups and think-aloud interviews. Aside from quality, patients value convenience and cost—and may prefer a hospital that is closer to their home or one with a lower out-of-pocket payment.…”

“…The benchmarks were obtained from the 2021 March Current Population Survey Annual Social and Economic Supplement. 10 …”