VBP program rewards 231 low-quality hospitals

Editor's Note

Through its Value Based Purchasing (VBP) program, the  Centers for Medicare and Medicaid Services (CMS) paid bonuses to 231 hospitals with lower quality because their patients were less expensive, this study finds.

CMS began measuring both spending and quality in FY 2015 to encourage hospitals to provide more efficient care, a change from the VBP program’s original goal to reward hospitals for quality alone.

Using data from 2,679 hospitals participating in the VBP program, researchers found the new emphasis on spending rewarded low-quality as well as low-spending hospitals.

In FY 2014, 38% of low-spending hospitals received bonuses, compared with 100% in FY 2015. However, low-quality hospitals also began receiving bonuses−−17% in FY 2015 vs 0% in FY 2014.

The researchers concluded that CMS should incorporate a minimum quality threshold into the VBP program to avoid rewarding low-quality, low-spending hospitals.

1Anup Das (anupdas{at}umich.edu ) is an MD/PhD student in the Department of Health Management and Policy at the University of Michigan, in Ann Arbor. 2Edward C. Norton is a professor in the Department of Health Management and Policy, the Department of Economics, and the Institute for Healthcare Policy and Innovation, all at the University of Michigan, and a research associate of the National Bureau of Economic Research, in Cambridge, Massachusetts.