Medicare’s effort to reward hospitals for quality is leaving many of the nation’s safety-net hospitals poorer, a new analysis finds.
Dr. Ashish K. Jha, a professor at the Harvard School of Public Health, has found that hospitals treating the most low-income patients on average had their payment rates reduced by 0.09 percent in the latest round of Medicare’s program that rates hospitals’ quality. The hospitals with the fewest low-income patients received an average bonus of 0.6 percent. Government-owned hospitals in particular fared poorly, with Medicare reducing their payment rates by 0.10 percent for a year, according to Jha’s analysis, which he published Tuesday on his Harvard blog.
Medicare bases its bonuses and penalties, created by the federal health care law, on 24 quality measurements, including how patients rated hospitals in surveys and on mortality rates. In the second year of the program, which stretches from last month through September 2014, Medicare has reduced payments to 1,451 hospitals and increased payments to 1,231 hospitals based on those scores. During that period, Medicare will distribute $1.1 billion in the program, known as Value-Based Purchasing, with bonuses going to hospitals that either have better quality than most or that have improved their scores more than most.
A Kaiser Health News analysis of this year’s financial incentives shows that while safety-net hospitals as a group had larger penalties than other types of hospitals, 32 percent of safety-net hospitals fared well, earning bonuses of at least 0.2 percent, while 29 percent were given penalties of 0.2 percent or more.
But the group of hospitals with the fewest low-income patients did significantly better: 53 percent earned bonuses of 0.2 percent or more. Only 13 percent of these hospitals lost 0.2 percent or more, the KHN analysis found.