Value Based Payment

Many ‘failed’ federal healthcare quality programs need to end, analysts say

February 19, 2020 3:10 pm
  • A leading researcher says quality improvements have not materialized in the value-based purchasing, hospital-acquired conditions reduction or hospital readmissions reduction programs.
  • Bundled payments have had divergent effects depending on whether they were broad or narrowly focused.
  • Value-based savings generally come downstream from the providers leading the programs.

The quality improvement programs of recent years have produced uneven results, and continuing uncertainty may limit the role of quality measurement going forward, according to healthcare industry leaders.

Among many industry notables addressing a recent healthcare policy gathering in Washington, D.C., Ashish Jha, MD, professor of global health at Harvard University, said most federal quality-improvement models in recent years have failed to improve care.

“Targeted pay-for-performance [P4P] programs largely don’t work,” Jha said. “It doesn’t work, and we should largely stop trying to do it.”

The sentiment was echoed by a former leader of value-based payment in the Obama administration.

“It’s not just P4P that’s failed, I would say that our whole quality measurement enterprise has failed,” said Farzad Mostashari, MD, CEO of Aledade, which provides analytics and advice to physician-led accountable care organizations (ACOs).

Specific assessments by Jha, one of the nation’s leading healthcare researchers, included:

  • The Hospital Value-Based Purchasing (VBP) Program has been “an abysmal failure.”
  • The Hospital-Acquired Conditions Reduction Program has had “little to no effect,” research suggests.
  • The Hospital Readmissions Reduction Program has seen “most” of the resulting reductions driven by coding.

“If you look across [quality programs] on the ambulatory side as well, you get a very similar picture,” Jha said.

Programs with better results

Somewhat better results have come from quality programs that Jha described as having “broad” quality improvement goals, such as ACOs.

“The literature on ACOs is actually pretty positive,” Jha said, noting that reported savings relative to fee-for-service care are between 2% and 5%. But those savings may not have come with many quality improvements outside of reduced hospitalizations.

“I’m not seeing a ton of data that are saying, ‘ACOs are leading to better-quality care,'” Jha said.

The quality outcomes for bundled payments diverge between models aimed at medical conditions and those for surgical procedures.

Bundles aimed at conditions like pneumonia “have been a big strikeout; they haven’t saved that much money,” Jha said.

However, surgical bundles, like those for hip or knee replacements, generally save 4% to 5%, and “quality has stayed stable or gone up a little bit,” he said.

Lessons on the sources of savings

A key lesson of the various models is that savings generally have come “downstream” from the convening provider, Jha said. For instance, physician-led ACOs save money by reducing hospitalizations, and hospitals save money in bundled payments by reducing post-acute care.

“So, it’s coming out of somebody’s pocket, and it’s worth understanding that when you think about scaling and you think about the political issues,” Jha said.

Mostashari agreed and noted that the biggest savings found by the independent primary care practices that are clients of Aledade was an 8% reduction in their patients’ emergency department use.

 “And that’s just access — better access to primary care,” Mostashari said.

Other savings came from a 13% reduction in all-cause hospitalizations through prevention.

Next steps in value-based care

The ineffectiveness of some quality efforts was not surprising, Jha said, but policymakers should end programs, like the hospital VBP program, when warranted.

“We have to get rid of stuff that really hasn’t worked after a decade of efforts and focus on things that have and figure out how to push them forward,” Jha said.

In an interview, Jha said he was generally optimistic about some of the emerging federal approaches, like value-based care initiatives in Medicare Advantage plans, but that there were no upcoming models about which he was particularly optimistic.



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