Funding

Our center is funded by the grants listed below:

National Institute on Aging: The Comparative Effectiveness of Sequential Implementation of Hospital Value-Based Purchasing

 Despite the widespread use of financial incentives to improve value in health care, the comparative
effectiveness and unintended consequences of alternative designs of these programs remains unclear. The
Patient Protection and Affordable Care Act established Hospital Value-Based Purchasing (HVBP), making
Medicare payment subject to quality performance for Acute Care Hospitals in the United States. The objective
of the current project is to apply econometric methods to longitudinal Medicare data and primary data from a
national survey of hospital administrators to compare the effectiveness and unintended consequences of the
alternative incentive structures of HVBP as the program evolves in its first five years of implementation. The
following three aims will be addressed: 1) Evaluate the comparative effectiveness of alternative incentive
designs of HVBP. It is expected that HVBP will have a greater impact on patient mortality and patient
experience as the financial incentives increase over time and performance measures shift from a focus on
compliance with evidence-based medicine (process measures) to a focus on mortality and patient experience.
The analysis strategy will take two general approaches, testing for differences in performance improvement for
the incentivized measures between hospitals exposed and not exposed to HVBP, and testing for differences in
performance improvement between diagnoses that are incentivized and not incentivized under HVBP; 2)
Evaluate the unintended consequences of alternative incentive designs of HVBP. It is expected that the
unintended consequences of HVBP – including the distribution of incentive payments away from hospitals
caring for disadvantaged patients and attenuated improvements in care for patients treated in these hospitals –
will become more severe over time as incentives increase and are shifted toward outcome performance; 3)
Understand the barriers and facilitators to value improvement in HVBP. The study team will field a national
survey to assess hospital administrators' knowledge of HVBP, perceptions of the costs and benefits of value
improvement, perceptions of unintended consequences, perceptions of the barriers and facilitators to value
improvement, and the specific strategies used for value improvement in HVBP. We will contrast survey
responses between high and low performing hospitals in HVBP. The proposed research is significant because
it will provide crucial information to inform the incentive structure in future years of HVBP to increase value for
Medicare while minimizing unintended consequences for hospitals and patients. Our national survey of hospital
administrators is innovative because it would provide the first estimates of how hospitals responded to the
incentives of HVBP. Approximately 190,000 Medicare patients admitted to hospitals each year with heart
attack, heart failure, or pneumonia die within 30 days of admission. A 1% reduction in 30-day mortality rates
would leave 1,900 of these patients alive after 30 days. This potential impact of HVBP underscores the
importance of understanding how HVBP can be optimally designed to improve care.

Agency for Healthcare Research and Quality: Changes in Hospital Quality, Safety, and Spending under the Hospital Acquired Condition Reduction Program

Hospital acquired conditions (HACs) are common, costly, and deadly. Despite recent reductions, HACs still
occur at a rate of 121 events per 1,000 discharges. Building on previous payment reforms to reduce HACs, the
Centers for Medicare and Medicaid Services initiated the Hospital Acquired Condition Reduction Program
(HACRP). However, the effect of expanding incentives for patient safety under the new HACRP is unknown.
The objective of the current proposal is to understand the impact of the HACRP on patient and system
outcomes and the specific strategies used by successful hospitals to improve under the program. Our proposal
will address the following three aims: Aim 1: Evaluate the effects of the Hospital Acquired Condition
Reduction Program on patient outcomes. We will evaluate the effects of the HACRP on both targeted
measures (e.g. patient safety indicators) and downstream outcomes (e.g. 30-day mortality and readmission).
We will examine how much administrative changes (e.g. increases in coded severity and changes to
denominator criteria) explain the impact of the HACRP. We hypothesize that the HACRP will lead to decreases
in targeted measures but will have an attenuated effect on downstream outcomes. We also hypothesize that
hospitals with more revenue at risk under the program and hospitals that are engaged in more value-based
reforms will experience greater improvements in targeted outcomes; Aim 2: Evaluate the effects of the
Hospital Acquired Condition Reduction Program on spending. We will evaluate the effects of the HACRP
on 30-day total episode spending as well as spending related to the index hospitalization, physician services,
readmissions, hospital outpatient care, and post-acute care services. We hypothesize that the HACRP will lead
to decreases in total episode spending as well as the downstream components of episode spending; Aim 3:
Evaluate the factors responsible for improvement under the Hospital Acquired Condition Reduction
Program. We will perform a case study analysis of hospitals in Michigan that participate in the Michigan Value
Collaborative, a partnership between BlueCross BlueShield of Michigan and 75 acute care hospitals in
Michigan working to improve quality and value. We hypothesize that hospitals that are engaged in systematic
quality improvement efforts will experience greater improvements on both targeted performance measures and
downstream patient outcomes. Our study is significant because our findings will be used to inform decision
makers at the CMS about the impact of new reimbursement mechanisms on quality, safety, and spending. Our
findings will also provide hospitals and clinician leaders with actionable insights about how to improve HACs.
Our study is innovative because it uses unique data linkages, provider collaboratives, and multiple methods to
evaluate upstream and downstream effects of a key policy reform.