Study: Value-Based Medicare Payment Reform is Working
A study from Stanford University found a drop in hospital-acquired illnesses because of Medicare payment reform.
- There are several goals for payment reform in the healthcare industry. Ultimately it boils down to cost, effectiveness and value. With every attempt to reform, there needs to be an evaluation period to ensure that it is having the desired effect.
Recently, researchers at the Stanford University School of Medicine had a report published in the Journal of General Internal Medicine. It focused on Medicare reimbursement reform that is aimed at reducing easily preventable, hospital-acquired health conditions and found evidence that it is working.
Specifically, the report a change made in 2008. Previously, the Centers for Medicare and Medicaid Services had paid hospitals for treatment, even if the ailment was something easily preventable that was acquired while in the hospital. That practice has since stopped for several hospital-acquired conditions. This move, and others like it, have been prominent in recent years as the shift away from fee-for-service to value-based care is in full swing.
“We have a win-win. We have patients who are avoiding adverse events while Medicare saves money,” lead author Risha Gidwani, DrPH, a consulting assistant professor of medicine at Stanford and a health economist at the Veterans Affairs Health Economics Resource Center in Menlo Park, said in a press release.
She went on to say that the study shows evidence that reimbursement reform is having its desired effect as Medicare or private payers are thinking about expanding value-based purchasing programs.
The team examined records from 2007 through 2009 from a national database of American hospital discharges, for Medicare patients ages 65-69 with non-medicare patients ages 60-64 who received the same procedure. In one instance they examined patients who has received a hip or knee replace, which carried a risk of developing a pulmonary embolism or deep-vein thrombosis while in the hospital. Once CMS stopped paying for these after procedure ailments in 2008, the number of incidents dropped 35 percent in the Medicare population as well as a drop in ailments for those over 65 that had private insurance. There was a slight increase in the number of hospital conditions for the younger, non-Medicare population.
Study co-author Jay Bhattacharya, MD, PhD, professor of medicine and director of the Stanford Program said there is clear evidence that value-based care is working.
“It may seem obvious that Medicare should use payment incentives for providers to encourage better and more appropriate care for patients, but there is always a risk of unintended consequences when Medicare cuts payments for services,” Bhattacharya said. “In this case, we have found evidence that Medicare’s refusal to pay for complications arising from hip and knee surgeries really did reduce the incidence of those complications. I believe that there may be many more opportunities to improve patient outcomes by reforming provider payment practices, though lots of careful research will be needed to identify them.”
