An interview with Trent Haywood

Less-than-stellar patient satisfaction results are dragging down hospitals' value-based purchasing (VBP) scores-a tally that CMS intends to use in calculating Medicare reimbursements beginning October 1, 2012. 

The national median VBP score for hospitals is 54, according to a recent national analysis by VHA, Inc. "Hospitals need to raise that score to 70 if they want to maximize Medicare reimbursements under VBP, says Trent Haywood, MD, JD, chief medical officer at VHA Inc. and the former deputy chief medical officer of the Centers for Medicare & Medicaid Services (CMS).

The Medicare VBP program will be built on the current Reporting Hospital Quality Data for Annual Payment Update Program-commonly known as Hospital Compare. Right now, hospitals only lose Medicare dollars if they fail to report Hospital Compare measures. Once VBP launches, a portion (1 percent and eventually 2 percent) of the hospital's Medicare payment will be tied to a hospital's performance on these measures.


Access the CMS report to Congress: Plan to Implement a Medicare Hospital Value-Based Purchasing Program, 2007.


Why is it so urgent for providers to begin improving their VBP performance scores?  

Haywood: I think hospitals might be confused about how much time they have. They see that the VBP program is starting in FY13, which is October 2012, and think they have a few years. But that's not the way it works. Whether you know it or not, you are already in a value-based purchasing environment.

The first performance period (or year) actually begins January 1, 2011 and runs through December 31, 2011. This means the baseline period is right now.

How can a hospital determine its VBP performance score?  

Haywood:The VBP score is a weighted combination of a hospital's clinical core scores and patient experience score. It's anticipated that VBP score weighting is 70 percent on clinical and 30 percent on patient experience or HCAHPS.

Hospital leaders can calculate their VBP score by following the model that is spelled out in CMS' 2007 report to Congress. We have also developed a tool-the Value Calculator-that allows our members to obtain their VBP score.

How did you determine that hospitals need to raise their VBP scores above 70 to maximize Medicare reimbursement opportunities? Where did you get this number?  

Haywood: We looked to see where hospitals' top decile performance is for total VBP scores. And right now, top decile performance is at 70. We are advising hospitals to get into the top decile of performance so they give away the least amount of dollars.

The reality is that most hospitals will probably be losing some of their Medicare reimbursement under VBP program. But it's a matter of degree: How much do you really want to give away?

According to Section 3001 of the Affordable Care Act, 1 percent of a hospital's Medicare dollars is at risk under VBP in FY13. (This rises to 2 percent in 2017.)

However, hospitals that have higher VBP scores will recoup some of that loss. CMS is incentivizing hospitals to improve their performance by giving high-performing hospitals back a portion of the 1 percent reduction. The higher the VBP performance, the larger the hospital's VBP incentive payment; potentially, the top-performing VBP hospitals could actually receive more than a 1 percent return.

Can you explain how patient experience results, or HCAHPS scores, are dragging down overall VPB scores? How badly are hospitals doing on HCAHPS?  

Haywood: Hospitals are not doing well on HCAHPS scores in comparison to clinical process scores. The national median score for HCAHPS is 21, with top decile performance at 67.

As a comparison, median scores on core clinical measures is 64, and the top decile is 81.

The question to ask is: How well did my hospital perform compared to the rest of market? On many of the core clinical indicators, hospitals are performing pretty close to each other. This is not true for every single clinical measure-but for many of them.

With HCAHPS, there is a much wider distribution. While many hospitals are starting to focus on patient satisfaction, many still have room for improvement.

VBP scores are based on both clinical process measures and HCAHPS scores. When we combine these two scores, we see that HCAHPS is a big factor in determining how well a hospital is doing. Given that, VBP scores will be relative to other hospitals. Hospitals that improve their HCAHPS scores have a significant opportunity to raise their overall VBP score above others, since that's where the biggest gaps in performance are.

So we are strongly encouraging hospitals to focus on improving HCAHPS scores over the next year or so. Some hospitals may also need to improve certain core clinical measures as well. For instance, blood clot prevention during surgery continues to be an area that requires attention by many hospitals.

How are you helping hospitals improve patient satisfaction?  

Haywood: We are using a different model than many are advocating right now. A lot of people in health care are using factory-based or engineering models (such as Six Sigma and Lean manufacturing) for purposes of performance improvement.

Our model is a context-based design model that looks at the organizational practices that impact the nurse-patient interaction. The benefit of this model is that it is not prescriptive, but allows organizations to uncover the barriers that impact successful patient interactions.

We purposely chose to avoid a process engineering approach. Instead we recognized that these social interactions require social science methodologies, which are behavioral economics, linguistics, anthropology, and design.

Can you share any specific examples for how to improve HCAHPS scores?  

Haywood: One thing we have found among hospitals that do well on HCAHPS is that these organizations do not wait until patients arrive at their acute care facilities to address satisfaction issues. They begin to establish a rapport with patients before they are admitted and continue this relationship after discharge. For instance, hospitals are establishing closer ties with community physicians as a way of reducing readmissions and building links with patients.

Will CMS be adding any new measures that might impact a hospital's VBP score?  

Haywood: In the first year, the VBP program will focus on five clinical conditions (acute myocardial infarction, heart failure, pneumonia, surgical care, and hospital-acquired infections), plus HCAHPS.

However, CMS adds or replaces measures on an annual basis. By October 2013, CMS is already required by law to include efficiency measures as part of the value-based incentive payment.

This is another reason why hospitals need to focus now on improving patient satisfaction. By next year, they may need to spend a lot of their time looking at resource use and getting expenses in order.


Trent Haywood, MD, JD, is chief medical officer, VHA, Inc., Irving, Texas, and former deputy chief medical offer at the Centers for Medicare & Medicaid Services (thaywood@vha.com).

Related Tool:Test Your Knowledge of Value-Based Purchasing.

Publication Date: Tuesday, September 21, 2010