The Early Effects of Medicare's Mandatory Hospital Pay-for-Performance Program

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Drawing on HCFO-funded work, this article evaluates the impact of hospital value-based purchasing (HVBP) on clinical quality and patient experiences during its initial implementation period (July 2011-March 2012).  The researchers use hospital-level clinical quality and patient experience data from Hospital Compare to conduct their analysis. Acute care hospitals were exposed to HVBP by mandate while critical access hospitals and hospitals located in Maryland were not exposed. The researchers performed a difference-in-differences analysis, comparing performance on 12 incentivized clinical process and 8 incentivized patient experience measures between hospitals exposed to the program and a matched comparison group of nonexposed hospitals. They also evaluated whether hospitals that were ultimately exposed to HVBP may have anticipated the program by improving quality in advance of its introduction. The researchers found that the timing of the financial incentives in HVBP was not associated with improved quality of care. It is unclear whether improvement for the clinical process measures prior to the start of HVBP was driven by the expectation of the program or was the result of other factors.

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