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. 2018 Sep:61:259-273.
doi: 10.1016/j.jhealeco.2017.07.006. Epub 2017 Aug 1.

Moneyball in Medicare

Edward C Norton  1 , Jun Li  2 , Anup Das  2 , Lena M Chen  2
Affiliations

Moneyball in Medicare

Edward C Norton et al. J Health Econ. 2018 Sep.

Abstract

US policymakers place high priority on tying Medicare payments to the value of care delivered. A critical part of this effort is the Hospital Value-based Purchasing Program (HVBP), which rewards or penalizes hospitals based on their quality and episode-based costs of care and incentivizes integration between hospitals and post-acute care providers. Within HVBP, each patient affects hospital performance on a variety of quality and spending measures, and performance translates directly to changes in program points and ultimately dollars. In short, hospital revenue from a patient consists not only of the DRG payment, but also of that patient's marginal future reimbursement. We estimate the magnitude of the marginal future reimbursement for individual patients across each type of quality and performance measure. We describe how those incentives differ across hospitals, including integrated and safety-net hospitals. We find evidence that hospitals improved their performance over time in the areas where they have the highest marginal incentives to improve care, and that integrated hospitals responded more than non-integrated hospitals.

Keywords: Incentives; Integrated care; Medicare; Pay-for-performance; Value-based purchasing.

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Figures

Figure 1
Figure 1
Box and whisker plots of the distribution of the change in annual Medicare payments (always negative) for Michigan hospitals if they had had one additional mortality, for AMI, heart failure, and pneumonia.
Figure 2
Figure 2
Box and whisker plots of the distribution of the change in annual Medicare payments (always positive) for all hospitals nationwide if they improved the measure by one decile.
Figure 3
Figure 3
Box and whisker plots of the distribution of the change in annual Medicare payments (always positive) for all hospitals nationwide if they improved the measure by one decile.
Figure 4
Figure 4
Box and whisker plots of the distribution of the change in annual Medicare payments (always positive) for all hospitals nationwide if they improved the measure by one decile.
Figure 5
Figure 5
Mean change in Adjustment Factor (y-axis) for a one-decile improvement in overall hospital rating, using national data, conditional on achievement points (x-axis) and improvement points (different lines).
Figure 6
Figure 6
Mean change in Adjustment Factor (y-axis) for a one-decile improvement in AMI 30-day mortality, using national data, conditional on achievement points (x-axis) and improvement points (different lines).
Figure 7
Figure 7
Mean change in Adjustment Factor (y-axis) for a one-decile improvement in Medicare spending per beneficiary, using national data, conditional on achievement points (x-axis) and improvement points (different lines).
Figure 8
Figure 8
Mean change in Adjustment Factor (y-axis) for a one-decile improvement in use of beta blockers during perioperative period, using national data, conditional on achievement points (x-axis) and improvement points (different lines).
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References

    1. Burwell SM. Setting value-based payment goals – HHS efforts to improve U.S. health care. New England Journal of Medicine. 2015;372(10):897–899. - PubMed
    1. Centers for Medicare & Medicaid Services. Frequently asked questions hospital value-based purchasing program 2012a
    1. Centers for Medicare & Medicaid Services, Federal Register. Medicare program; hospital inpatient prospective payment systems for acute care hospitals and the long-term care hospital prospective payment system and fiscal year 2013 rates; hospitals’ resident caps for graduate medical education payment purposes; quality reporting requirements for specific providers and for ambulatory surgical centers. Final Rule. 2012b;77:53257–53750. - PubMed
    1. Centers for Medicare & Medicaid Services. Hospital value-based purchasing program fact sheet 2013a
    1. Centers for Medicare & Medicaid Services. National provider call: Hospital value-based purchasing 2013b

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