Making the Best of Hospital Pay for Performance


In October 2012, US acute care hospitals will begin to be paid for performance under the Medicare Hospital Value-Based Purchasing (VBP) program. Accumulating evidence, however, raises serious doubts about whether the program will improve value in health care. For VBP to be successful, we need to learn how hospitals learn, monitor fiscal side effects, and make improvements quickly, whenever possible. Whether we like it or not, hospital pay for performance is here to stay. Other payment-system changes (such as bundled payments and accountable care organizations) will be tested in the near future, but VBP will be the first highly visible manifestations of health care reform to affect the lives of many practicing clinicians and the institutions in which they work. It will be critical to ensure that VBP is as good as it can be to start with, and flexible enough, allowing the Centers for Medicare and Medicaid Services to adjust nimbly.

Keywords: Hospitals, Salaries and Fringe Benefits, Value-Based Purchasing, Health Care Reform, Cardiology, Health Expenditures, Accountable Care Organizations, Centers for Medicare and Medicaid Services (U.S.), Insurance, Health, Reimbursement, United States

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