This article appears in the March 2014 issue of HealthLeaders magazine.
The federal government's new efficiency measure, the latest effort to incentivize higher-quality, less-costly care, is one that has surprised, confused, and frustrated many hospital leaders whose payments will soon be impacted by the new rule.
One of the questions they ask in their letters of protest: How can hospitals be held accountable for services their patients receive after they're discharged or even before they're admitted? Another question: How is it fair to financially penalize them without first adjusting for socioeconomic factors, which this controversial measure does not do?
But despite these and other concerns surrounding Medicare's new spending per beneficiary equation, or MSPB, some hospital leaders say they embrace the new measure because they know the healthcare system's mosaic of providers ultimately must work much more efficiently, together, in the interest of the patient.
"This measure has now been placed on us, and we as hospitals have to own this and accept this responsibility," says Jeffrey DiLisi, MD, vice president and chief medical officer of 342-licensed-bed Virginia Hospital Center in Arlington, whose MSPB in December 2013 was 0.95, lower than the national average.
Hospital leaders' complaints that the rule is unfair because they have no control over this spending "sounds like an excuse," he says, because they actually do have control.
With this measure, CMS encourages hospitals to exert influence—perhaps through their powers of referral—over community physicians, skilled nursing facilities, home health agencies, durable medical equipment providers, and hospices to ensure that they improve the quality of care delivered and not provide unnecessary care.
Keeping readmissions low
Because his organization saw this measure coming, DiLisi says Virginia Hospital Center has been working with provider partners to keep readmissions low.
"Over the past three years, we've had multiple meetings with the executive teams at our skilled nursing homes and home health agencies, telling them 'We don't want you sending someone back to the ER in the middle of the night for something that you could have taken care of safely at the facility,' " he says.
"We're fortunate that we have some good home health providers here," DiLisi says. "However, there is certainly variability, and now our case managers make decisions based on which agencies provide the best care for the patients they are servicing."
"For hospitals that look at this metric seriously," he says, "they will find their providers who are not causing unnecessary readmissions. Those are the better-value providers that we should be sending our patients to."