GAO finds no evidence to date that VBP program improved care

According to a story released by Kaiser Health News, the Government Accounting Office (GAO) has found that Medicare’s quality incentive program for hospitals, which provides bonuses and penalties based on performance, has not led to demonstrated improvements in its first three years.

GAO's analysis found no apparent shift in existing trends in hospitals' performance on the quality measures included in the HVBP program during the program's initial years. However, shifts in quality trends could emerge in the future as the HVBP program continues to evolve. For example, new quality measures will be added, and the weight placed on clinical process measures—on which hospitals had little room for improvement—will be substantially reduced.

The Centers for Medicare & Medicaid Services did not respond to the report. CMS officials previously stressed that financial incentives like these will have a long-term effect by focusing hospitals more on quality.

The Government Accountability Office examined the Hospital Value-Based Purchasing Program, one of the federal health law’s initiatives to tie payment to quality of care. Earlier this year Medicare gave bonuses to 1,700 hospitals and reduced payments to 1,360 hospitals based on their mortality rates, patient reviews, degree of improvement and other measurements.  While the payments to a majority of the nation’s hospitals have been affected each year, according to the analysis the financial effect has been minimal.  

Safety-net hospitals, which serve more poor patients, tended to do worse than hospitals overall, but that difference has decreased over the life of the program, the report said. Hospitals with the strongest balance sheets tended to do better than other hospitals, the report found:  Those with a net income margin  more than 5 percent received average bonuses of 0.23 percent, while hospitals basically breaking even financially on average did not earn any extra payments.