Starting in October, Medicare will pay hospitals according to the quality, not just the quantity, of services they provide beneficiaries.
The U.S. Department of Health and Human Services announced it will launch the Hospital Value-Based Purchasing program, which is authorized under the Affordable Care Act and supports the goals of Partnership for Patients, a new public-private effort to improve quality, safety and affordability of health care.
Over the next 10 years, the program could save Medicare $50 billion and result in billions more in Medicaid savings, according to the Obama administration. Medicare provides health insurance for people 65 and older, and Medicaid provides medical insurance coverage for low-income children, elderly, blind and disabled people.
Mechanics of the Hospital Value-Based Purchasing initiative
In fiscal year 2013, about $850 million will be allocated to hospitals based on their overall performance on a set of quality measures. The money will be taken from what would have been spent on hospital stays, and the fund will grow over time as emphasis for payment shifts from quantity to quality.
Quality measures will determine whether hospitals follow best clinical practices, such as:
- Making sure heart attack patients receive care within 90 minutes
- Providing surgery patients with care within 24 hours to prevent blood clots
- Communicating discharge instructions to heart failure patients
- Keeping facilities clean and well-maintained
Over time the Centers for Medicare and Medicaid Services will add new measures that focus on improved patient outcomes and prevention of hospital-acquired conditions.