Last week I contended that the increasing utilization of hospital emergency services is a good thing.   Before anyone else could do it, I then excommunicated myself from the punditry religion which as a matter of dogma feels otherwise.

This week I will expose myself to possible capital punishment by committing a felonious act against the common view held by a motley crew of policy makers, “leaders” of large healthcare delivery organizations and consultants always on the lookout for a new opportunity to offer their services. Where is Joan of Arc when you need her?

So what heinous act am I committing?  It has to do with the Affordable Care Act (aka “ACA” or “Obamacare”). The ACA was not just a vehicle for mandating insurance coverage.  There were other goodies in its 2000 plus pages including the hospital “Value Based Purchasing Program” or VBP which would be applied to the Medicare program.

VBP also sometimes goes by the more accurate name of “Pay For Performance”.  You don’t see that term used as often as it seems crass to policymakers and politicians, neither of whom wants the public to know what they really are up to.

Under VBP, the Medicare people issued an ever-changing set of goals which if hospitals met them, they would receive a bonus in Medicare reimbursement.  Not meeting the goals would result in a decrease in reimbursement.  The goals would change from process oriented (i.e., did you do the right thing for the patient) to outcome oriented (i.e., how did the patient do) and back again.  With the constant changes in goals and the bureaucracy necessary to oversee VBP, things got complicated.

The VBP was embraced by leaders of large healthcare delivery organizations who always are seeking virtue and a possible cover story about their virtuous selves in “Modern Healthcare” magazine. Here is a way to improve quality, they croaked

Insurance companies also eyed pay for performance as perhaps being adaptable for their  contracts with hospitals.  The insurance companies were not interested in virtue or quality; they were interested in a better bottom line.  VBP gave them good cover.

Your eyes will quickly get crossed if I go into too much more detail.  We are now eight years into VBP and the results are at best mixed.  Studies disagree as to whether VBP has resulted in an improvement in patient care however it is defined.  VBP or pay for performance so far is a disappointment to policymakers but a continued boon to Medicare bureaucrats.

It also is a bit of paradox.  VBP awards more money to hospitals for doing what they are supposed to do, at least according to the goals issued by Medicare.  You get less money if you don’t meet the mark.

Why should you get more money than standard Medicare reimbursement for simply meeting, not exceeding, a standard of care?

There can be very good reasons, particularly for outcome related goals, that a hospital misses a goal.  It may not have enough patients in a given year subject to the goal to adequately measure performance.  It may serve a demographic segment which is less compliant.  A strong case can be made that these hospitals should receive MORE not less reimbursement in light of their circumstances.

At its core,  VBP or pay for performance is not about quality.  It is yet another cost control mechanism.  That is a hard truth that the virtue seekers heading large healthcare systems refuse to acknowledge.

Modern Healthcare recently had this quote in an article about alternatives to VBP that might be more effective:

“We pay more for our healthcare in the U.S. because we pay our providers more,” said Christopher Koller, president of the Milbank Memorial Fund and a former Rhode Island health insurance commissioner. “We have to put the whole system on a diet and let them figure out how to live with it.”

Aside from being Captain Obvious, this guy deserves credit for being honest about the actual intent of the VBP. He has no future in politics.

There you have it.  It’s about money and the solution is to reduce reimbursement. Medicare already pays what it wants for care.  Just ratchet it down further.  End the pretense about it being about quality.  Watch more hospitals, particularly in rural areas, go out of business.

I cannot wait to see how this works under M4A (Medicare For All).

Excuse me as I have a date with the firing squad.


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