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Background: The Hospital Value-Based Purchasing Program (HVBP) is a pay for performance system that impacts traditional Medicare fee-for-service payments to hospitals through rewards and penalties. Objectives: To explore variation in overall and individual-hospital total performance score (TPS) and embedded domains for hospitals during 2014-2018. Data Source: Hospital data were retrieved from the publicly available HOSArchive dataset. Study Design: Distribution of annual TPS and HVBP domain scores for 2014-2018 was evaluated using descriptive statistics. Transitional probabilities were analyzed to evaluate annual movement in the TPS ranking for outlier hospitals in the Top and Bottom 5%. Principal Findings: TPS scores are positively skewed while the distribution of domain scores vary with patient experience, (clinical) outcome, and efficiency domains having a large number of (positive) outliers. Mean TPS score decreased from 40.54 in 2014 to 38.04 by 2018. Improvement was shown in mean domain scores for clinical process of care and clinical outcome using 95% confidence intervals, with hospitals gaining 10 points over the study period in clinical outcome. Changes in the mean scores for other domains did not show consistent increases or decreases. Chi-square analyses of hospital ranking categories showed some evidence that, as a group, hospitals initially ranked in the Bottom 5% are making consistent annual movements to higher categories. In contrast, over half of the hospitals ranking in the initial Top 5% remained in the top category across all study years. Conclusions: It may be time for CMS to redesign the HVBP incentive program to assure the measures accurately demonstrate sustained improvement, the domain weights appropriately reflect the level of importance, and the TPS comparative ranking methodology does not discourage lower-performing hospitals from actively improving the care they deliver and achieving top ranks. KEYWORDS Hospital Value-Based Purchasing program, incentive payment, total performance score, 1 INTRODUCTION The Hospital Value-Based Purchasing Program (HVBP) is a pay for performance program that impacts traditional Medicare fee-for-service payments to hospitals through rewards and penalties. The intent is to [...]

Objective. To corroborate anecdotal evidence with systematic evidence of a lower threshold for admission among for-profit hospitals. Data Sources. The study used Florida emergency department and hospital discharge datasets for 2012 to 2014. The treatment variable of interest was for-profit-designated trauma center status. The dependent variable indicated whether a patient with mild-to-moderate injuries was admitted after presenting as a trauma alert and then discharged to home. A separate analysis was conducted of discharges that had a 1-day length of stay. Study Design. Generalized estimation equations with logistic distribution models were used to control for the confounding influences and developed for four groups of patients: ICISS = 1 (no probability of mortality), ICISS [greater than or equal to] 0.99, ICISS [greater than or equal to] 0.95, and ICISS [greater than or equal to] 0.85 (zero to 15 percent probability of mortality, which includes all mild and moderate injury patients). Principal Findings. For the ICISS = 1 and ICISS [greater than or equal to] 0.99 models, the centers' for-profit status was the most important predictor. In the ICISS [greater than or equal to] 0.95 and ICISS [greater than or equal to] 0.85 models, injury type played a more important role, but for-profit status remained important. For patients with a 1-day stay, for-profit status was associated with an even higher probability of hospitalization. Conclusions. Considerable differences exist between for-profit and not-for-profit trauma centers concerning hospitalization among the study population, which may be explained by supplier-induced demand. Key Words. Incentives in Health Care, ownership, hospitals, supplier-induced demand, For-profit (FP), also known as investor-owned, and not-for-profit (NFP) hospitals differ in important ways. Perhaps most important is the influence of shareholder preferences on the behavior of the hospital firm. [...]

A study of 140 hospitals in Florida found that about 15%-20% were found to be either high-profit or low-profit between 1990 and 1992 based on pretax operating margins (PTOM) and pretax return on assets measures (PROA). The PROA high-profit group showed a greater Medicare mix and a greater case-mix index. The high-profit group also had higher productivity and lower adjusted average lengths of stay., Summary The organizational and operational characteristics of 140 private Florida hospitals with sustained high profitability and sustained low profitability were compared using pretax operating margin (PTOM) and pretax return on [...]

Managed care capitation schemes entail objective and subjective financial risks. Objective risks can be quantified using anticipated variations in costs and revenues, but subjective risks can still occur if financial managers cannot reasonably anticipate cost and revenue variations. Subjective risks may be minimized by acquiring sufficient data on the population covered by capitation, recruiting a sufficient client base, reducing healthcare service costs and implementation of prevention programs to reduce the volume of clients seeking treatment.

Data provided by a 1989 study on profitability among hospitals revealed that debt load, labor intensity and Medicare mix were factors that directly influenced the exceptionally high or low profitability. However, the extent of the effects of these factors was largely dependent on hospital administration. Thus, hospital administrators can reduce the probability of low profitability or increase the probability of high profitability depending on the decisions that they make.

A multiple regression analysis was used to attempt to identify hospitals' underlying profitability determinants. The analysis, which measured the effects of 22 variables, found that several patient-mix and managerial variables, including Medicare and Medicaid mix, uncompensated care mix, labor intensity and age of plant, are profitability predictors. Structural factors beyond managerial control do not appear to strongly influence profitability., Summary Although numerous studies related to hospital costs and financial condition have been conducted, no studies have specifically attempted to identify the underlying determinants of hospital profitability. If these factors [...]