Value-Based Purchasing: Implications for Hematology

February 2016 Vol 9, Special Issue: Payers' Perspectives in Oncology
Chase Doyle

Medicare has initiated several programs in the past decade to encourage value, but questions remain regarding their effectiveness. At ASH 2015, Andrew Ryan, PhD, MA, Associate Professor of Health Management and Policy, University of Michigan School of Public Health, Ann Arbor, addressed the implications of using financial incentives to drive care quality and reduce cost.

“Many quality indicators are moving in the right direction,” said Dr Ryan. “At the same time, we don’t see a lot of evidence that these programs are associated with incremental benefits,” he said.

“The one exception is the Hospital Readmissions Reduction Program, which does seem to be reducing readmissions, although we have potentially offsetting, unintended consequences that need to be weighed against those benefits,” Dr Ryan added.

What Do We Mean by “Value”?

Dr Ryan said that the essence of value can be defined simply as the ratio of quality to cost. Although cost is relatively straightforward, quality can be a more amorphous concept, comprising clinical performance, patient experience, and patient outcomes. “Quality means a lot of different things to a lot of different people,” he observed.

The Centers for Medicare & Medicaid Services (CMS) has implemented several programs to foster value in Medicare over the years, including the Premier Hospital Quality Incentive Demonstration, Hospital Value-Based Purchasing, accountable care organizations, the Medicare Advantage Quality Bonus Payment Demonstration, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Payment Modifier.

Of the 280 quality measures in the PQRS, most (65.4%) are related to clinical process performance (ie, delivering the right care to the right patient at the right time), according to Dr Ryan.

“We’ve gone from a system that awards physicians for participating in PQRS to now penalizing physicians for not reporting in PQRS,” he said. Despite the increase in performance measures (and penalties), doubt about their effectiveness remains.

Value-Based Purchasing

“Since we’ve started reporting for hospitals in 2005, we’ve seen a steady increase in performance and clinical process measures,” said Dr Ryan. “The Hospital Readmissions Reduction Program has seemingly improved process performance and has reduced ­readmissions.”

Although an increase in clinical process performance was observed over time, Dr Ryan reported no improvement in patient outcomes associated with the start of the program.

“Public reporting has not improved outcomes or impacted consumer choice,” he said. “The effect of incentives on process in Premier demo attenuated over time, and there were no improvements in mortality outcomes that were associated with this program.”

In addition, the Hospital Value-Based Purchasing program did not improve clinical outcomes and patient experience in its first year.

Even more troubling is the evidence that decreases in readmissions may be driven by hospitals classifying patients in other units rather than having patients readmitted to patient wards.

“There is a real question about the validity of performance measures being used,” he said. “We’re just not sure how valid these claims-based outcome measures really are.”

Finally, there is concern that performance incentive measuring could lead to further disparities in payments. Although CMS is aware of the problem and is trying to adjust it, hospitals caring for more difficult or complicated patients, for example, tend to do worse in these measures, Dr Ryan suggested.

Implications for Hematologists

Starting in 2018, when the Merit-­Based Incentive Payment System will take effect, physicians are going to have to choose whether or not to align themselves with accountable groups, said Dr Ryan.

“Are hematologists going to be able to fit comfortably in these new groups, or not? And how should drug prescribing and drug costs be accommodated in value-based payment systems?” he asked.

“This is a big part of hematologic care,” Dr Ryan concluded. “We need to address these issues moving forward to make sure that the measures in PQRS are taking us where we want to go.”

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Last modified: February 24, 2016
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