The Affordable Care Act of 2010 established the Hospital Value-Based Purchasing (HVBP) initiative (effective FY 2013), affecting over 3500 U.S. hospitals. This initiative was focused on rewarding those hospitals that provide quality of care to Medicare patients versus the traditional quantity of procedures (i.e., “fee for service”).
Initially, the program measured how well the standard of “best clinical practices” was being met. It also quantified patient experiences. The Patient Experience Questionnaire currently measures pain management, clinician communication, discharge education, and overall hospital responsiveness. Later this year, additional parameters, such as outcome-based processes and clinical efficiencies, will be measured. Incentive payments for compliance will be phased in from 2013 to 2017.
After submitting 12-month performance data to the Centers for Medicare Services (CMS), the hospital will receive a score which determines its incentive payment. Some hospitals may receive low scores and therefore no incentive payments. Each hospital’s result will impact its bottom line for years.
As hospitals change the way they have been providing healthcare, the medical device industry must change as well. Medical companies may need to qualify and quantify the entire product value proposition in order to sell their products. It is now imperative to focus on the value of a product in helping the hospital achieve improvements and meet its goals.
How will you respond to the opportunities and challenges of Hospital Value-Based Purchasing?
The stakes are high, the metrics are evolving, and changes are here to stay. Medical Market Consulting can assist you in several ways including: (1) Customer research to determine how your products could enhance the hospital’s ability to improve patient satisfaction and outcomes; (2) Competitive analysis to determine how your competitors are responding to this challenge; (3) Market assessment to understand how physicians will relate product use to patient outcomes.
Medical Market Consulting can help you remain current and forward-thinking in your business planning.