The need for performance improvement in healthcare delivery has been a central focus of purchasers, payers, regulators and providers in the United States for some time. While there have been significant efforts by providers to advance quality outcomes, improve safety, reduce costs and increase patient satisfaction, these efforts have not yet taken us to where we need or want to be as an industry.
More than five years ago, a consortium of policy makers, regulators and the Federal government through the National Quality Forum began pushing providers for a paradigm shift in the way healthcare is delivered. The Centers for Medicaid and Medicare Services (CMS) and The Joint Commission in particular, began requiring hospitals to report on key quality metrics (i.e., patient satisfaction, medication errors, falls, readmissions and more) believing that transparency would increase accountability.
Now, for the first time in history, provider payment will be tied to performance. With the passing of the Affordable Care Act, several high-impact pay-for-performance programs have been introduced. Regulators and purchasers of healthcare are now facilitating an aggressive movement from our traditional volume-based payment system to a value-based payment system.
New payment provisions, including incentives and penalties, have been defined and will be administered by CMS. Through the American Recovery and Reinvestment Act and the Affordable Care Act, hospitals will see dramatic shifts in top-line revenues as a result of new pay-for-performance programs and the Meaningful Use program.
For a look at the impact of pay-for-performance programs nationwide, The Advisory Board Company has developed a map outlining the potential effects of value-based purchasing and readmissions programs for FY 2014. The map demonstrates how U.S. hospital and health system inpatient payments would be affected if CMS's proposed adjustment factors, released in April 2013, were finalized.