Hospital Value-based Purchasing program 1% incentive is like homeopathic medicine — too diluted to actually work

In the June 15, 2017 issue of the New England Journal of Medicine, Andrew Ryan and colleagues from the University of Michigan published an evaluation of the Medicare Hospital Value-Based Purchasing Program (HVBP).

To summarize, if you offer a 1% incentive, and then dilute it by offering it only for the 40% of hospital patients covered by Medicare, and then dilute it further by spreading it across three domains (clinical process quality, patient experience and mortality), and then dilute each of these by basing them on multiple component metrics, and then dilute it more by choosing metrics that have already been reported for a number of years (and therefore the “low hanging fruit” improvement opportunities may already have been picked), and then further dilute it by offering the incentive mixed in with many other incentives for such things as meaningful use of EMRs…..

Wait for it….
You don’t see impact, even after 4 years.
The thinking behind HVBP is like homeopathy, where the practitioners assert that the more they dilute the homeopathic remedy ingredient, the more powerful the remedy becomes.
Imagine if a company hired a CEO and wanted to incentivize her to achieve growth and profitability. Would they consider a 1% incentive to be meaningful (even without further dilution).  No, the board would choose a number 50 to 75 times higher.
How about an equipment manufacturer choosing an incentive percentage for its sales team?  One percent sound like enough?
I’ve been exasperated for years that our value-based reimbursement designs – for both government and commercial payers – include an incentive that is far too small to motivate the types of changes they are intended to cause.  I fear we are just setting ourselves up for eventually someone saying “well, we tried incentives, and they don’t work.”
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Looking back over the last 200 years, noticing progress to get energy to keep moving forward

I choose to be an optimist.  I can visualize a health care system that is better than the one we have. A system where we function as a coordinated team, learn from day-to-day care, enabled by analytic methods and information technology designed to make that happen. A system where we can measure improvement in patient experience and outcomes. A system that is efficient enough to make great care affordable and accessible to everyone.

But, I’ve been fighting the fight for long enough now that I can’t help but notice how little progress we’ve made. Whenever I come across work I did 20 years ago, I am struck by the fact that I could write the same thing today, and it would still be applicable. I might have to use my word processor to do a search-and-replace to update from old to new buzz words. But, we’re still struggling with basically the same barriers to real process transformation and still debating the same issues. It is valuable to face that reality, because the gap between expectation and reality is a source of “creative tension” that can be motivating. But, facing that reality can also be demoralizing if the gap looks more like a chasm that can’t be crossed.

It is in this context that I viewed an excellent 45-minute video created by the New England Journal of Medicine in celebration of the 200th birthday of the Journal in January, 2012. The video is entitled “Getting Better: 200 Years of Medicine.” I found it energizing to see how far we’ve come as a field, making a profound positive impact on human life — using the examples of surgery, chemotherapy, and AIDS treatment. It also exposes how long it took for changes to be accepted and adopted, before they eventually became standards of care. Maybe by the 250th anniversary presentation (shown on the holodeck?), the NEJM will celebrate breakthroughs in cost-effectiveness analysis, outcomes measurement, care coordination, team care planning, clinical process management, and patient-centered primary care.

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