Association between value-based purchasing score and hospital characteristics

BACKGROUND: Medicare hospital Value-based purchasing (VBP) program that links Medicare payments to quality of care will become effective from 2013. It is unclear whether specific hospital characteristics are associated with a hospital’s VBP score, and consequently incentive payments. The objective of the study was to assess the association of hospital characteristics with (i) the mean VBP score, and (ii) specific percentiles of the VBP score distribution. The secondary objective was to quantify the associations of hospital characteristics with the VBP score components: clinical process of care (CPC) score and patient satisfaction score. METHODS: Observational analysis that used data from three sources: Medicare Hospital Compare Database, American Hospital Association 2010 Annual Survey and Medicare Impact File. The final study sample included 2,491 U.S. acute care hospitals eligible for the VBP program. The association of hospital characteristics with the mean VBP score and specific VBP score percentiles were assessed by ordinary least square (OLS) regression and quantile regression (QR), respectively. RESULTS: VBP score had substantial variations, with mean score of 30 and 60 in the first and fourth quartiles of the VBP score distribution. For-profit status (vs. non-profit), smaller bed size (vs. 100–199 beds), East South Central region (vs. New England region) and the report of specific CPC measures (discharge instructions, timely provision of antibiotics and beta blockers, and serum glucose controls in cardiac surgery patients) were positively associated with mean VBP scores (p<0.01 in all). Total number of CPC measures reported, bed size of 400–499 (vs. 100–199 beds), a few geographic regions (Mid-Atlantic, West North Central, Mountain and Pacific) compared to the New England region were negatively associated with mean VBP score (p<0.01 in all). Disproportionate share index, proportion of Medicare and Medicaid days to total inpatient days had significant (p<0.01) but small effects. QR results indicate evidence of differential effects of some of the hospital characteristics across low-, medium- and high-quality providers. CONCLUSIONS: Although hospitals serving the poor and the elderly are more likely to score lower under the VBP program, the correlation appears small. Profit status, geographic regions, number and type of CPC measures reported explain the most variation among scores.