Tuesday, January 1, 2013

Funding Hospitals Based on Performance

Local hospitals fare OK in U.S. data

Many score well enough on care standards and patient surveys to receive more Medicare funds 

By  Ben Sutherly

The Columbus Dispatch Saturday December 22, 2012 5:54 AM
The federal government released new data this week that base nearly $1 billion in Medicare payments to U.S. hospitals next year on their performance, and the news was mostly good for central Ohio’s hospitals.
The data show how much hospitals stand to gain or lose — as much as 1 percent in Medicare reimbursement — based on how well they followed 12 clinical standards of care and scored on certain patient-satisfaction criteria.
A Kaiser Health News review of the data found that the gain or loss at nearly two-thirds of hospitals should be less than 0.25 percent of their regular Medicare payments, which exclude money for capital improvements, resident education and caring for the poor.
The public release of the data comes four months after the government announced the size of penalties for hospitals that readmitted too many patients just weeks after discharge.
Those readmission penalties also can be as much as 1 percent of a hospital’s Medicare reimbursement. That means that, theoretically, as much as 2 percent of a hospital’s Medicare revenue now hinges on how well it performs.
The changes are part of the federal health-care overhaul.
In many cases, local hospitals scored well enough on clinical-care standards and patient-satisfaction criteria — dubbed “value-based purchasing” by the government — to offset their losses from readmission penalties.
OhioHealth, for example, will receive about $400,000 in additional Medicare reimbursement through value-based purchasing. That’s more than enough to offset about $300,000 that the hospital system stands to lose through the readmission-rate penalty, said Steve Umland, OhioHealth’s senior vice president of finance.
Ohio State University’s Wexner Medical Center will recoup some of the $700,000 it expects to lose annually under the readmission penalty, and will end up with a net loss of about $500,000.

My opinion:
I'm not sure if this is the best way to spread money throughout the U.S. hospital system.  For example, what if some poorly performing hospitals cannot operate at all if they lose money, and they are the only hospitals within a large radius.  Then, health care access for certain individuals is eliminated.  Perhaps if the hospitals could be regulated to improve care, rather than taking money away from them, the results would be better.  However, I don't know what kind of regulations would work, if any.  I know this is also a debate in the education industry - now, teachers' pay might be determined by their performance.  Anyone else have any thoughts on this issue?

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