Despite the promise of a value-based purchasing approach for paying the nation's hospitals, the nation still has a ways to go in designing a system that is accurate and effective.
Testimony at a Senate Finance Committee roundtable on the topic Thursday provided a variety of opinions on the nation's readiness for moving to a quality-based system for reimbursing hospitals.
Comments on a report from the Government Accountability Office included questions about the approaches to obtaining data to gauge hospitals' quality.
That's just one issue that needs to be solved before the nation can move ahead on that type of reform. However, there's a sense of urgency to resolve these issues, said Sen. Charles Grassley (R-Iowa), one of the co-chairmen of the committee and the meeting.
The Deficit Reduction Act of 2005 directs the Centers for Medicare & Medicaid Sservices to implement a value-based purchasing program for Medicare beginning in fiscal year 2009 that would adjust payment to hospitals based on quality factors. Last November, CMS issued a blueprint for moving to a value-based system.
"Skyrocketing healthcare spending is at the forefront," Grassley said. "It's clear that we can't continue this trajectory of spending. Value-based purchasing is one way to 'bend' this long-term growth curve because it will mean concentrating taxpayer dollars on higher quality care and helping to weed out ineffective and lower quality healthcare from the system."
Patients with a variety of conditions or complications, such as those treated at teaching hospitals, will need specialized measurement approaches in gauging quality, said Gary Gottlieb, MD, president of Brigham and Women's Hospital in Boston, representing the Association of American Medical Colleges.
"Individual components of value-based purchasing pose unique challenges for our institutions," Gottlieb said. "The existing program is based on present on admission coding that cannot be quickly or perfectly implemented in many instances within the teaching hospital environment."
Any system used to measure quality should also "reflect the unique value that teaching hospitals add to the healthcare system," he added. "While our institutions perform well on many existing measures, there is little opportunity to demonstrate performance across the range of complex care our institutions deliver which cannot be found at other hospitals."
Hospital and provider incentives to provide high-quality care should be linked, said Thomas M. Priselac, president and CEO of Cedars-Sinai Health System in Los Angeles and chairman-elect of the American Hospital Association.
Priselac said the AHA believes that incentive approaches should provide rewards that motivate change and that any system should be implemented incrementally.
"There has been little well-designed evaluation of pay-for-performance approaches, and existing research shows mixed results," he said. "In most approaches, the driving element behind performance improvement cannot be identified. As payers continue to explore this concept, it should be phased in to allow continued testing of the concepts as they are tried."
The concept needs to be expanded, but initial intentions of the approach need to be re-examined, said Rick Norling, president and CEO of the Premier healthcare alliance, which has collaborated with CMS on a pay-for-performance initiative.
"We are highly concerned that value-based purchasing is intended to generate $1.65 billion in savings to the Medicare program over five years," Norling said. "Rather than serving as a means of cost saving to the government, the program must be used to drive change and create incentives for continuous quality improvement."