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Value Based Purchasing
What is Value Based Purchasing (VAP)?
In the health care delivery system, VBP is a
payment methodology that rewards quality of
care through payment incentives and
transparency*.
Purpose of VBP:
Medicare currently costs 16% of the federal budget and is
expected to rise to 20% by the year 2016*. The focus of VBP
is to hold hospitals accountable for the quality and cost of
the health care services they provide and reward them
accordingly. Patients who receive higher quality care have
shown better outcome with recovery and healing*. VBP
should help lower costs while increasing quality of services
that patients will receive.
History:
● The Hospital VBP Program was established by the
Affordable Care Act of 2010 (ACA)*.
● It got its roots from the 2003 “Medicare Prescription
Drug, Improvement, and Modernization Act” & the
2005 Deficit Reduction Act*.
● These earlier laws established a way for Medicare to pay
hospitals for reporting on quality measures, a necessary
step in the process of paying for quality rather than
quantity*.
Incentives:
Medicare has started holding back one percent ($850
million) of hospitals reimbursements in October 2012
under the VBP program. Hospitals can earn back the
amount they gave up and, if they performed better than
most, they will get even more. The health law directed that
the amount of money at stake will rise incrementally to 2
percent of reimbursements by October 2016. Close to 3,000
hospitals will be part of this program*.
Penalties:
● Hospitals that do not meet the quality of care and cost
starads will be paid less for each medicare patient they
treat and the money they lose will be handed to
hospitals that meet VBP program standards*.
Rating system:
Hospitals are being rated based on roughly
two-dozen quality measurements, including
surveys of patient satisfaction and death rates*.
Eligibility:
● Hospital must have inpatient prospective payment
system in place.
● Must meet minimum number of cases to qualify.
● Must have at least 100 HCAHPS surveys in the
performance period
● Meet a certain mortality rate for their patients.
● CLABSI will require the hospital to have at least one
predicted infection during the applicable period*.
Ingredients for Success
● Get the right people.
● Use the right technology
● Develop reliable processes.
How can Peoplesoft help?
PeopleSoft can provide the right technology and set up reliable processes that
will help hospitals with:
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Data storage
Project costing
Reports
Purchasing
Inventory
Human resources
Program management
Billing
Account payables
Account receivables
and much more...
Why need all that?
● Storage of data such as patients health reports, payment history, and
satisfaction rating will help determine the eligibility of a hospital to earn
rewards through the VBP program.
● Project costing modules can help hospitals manage their budget better and
meet the requirements that will make them eligible for extra payment by
medicare.
● Purchasing module will make it easier for hospitals to procure goods and
services.
● PeopleSoft can use its modules to keep track of assets, account balances
and entries of the hospitals by different departments or projects.
The End