Incentive Programs in Healthcare discussion assignment

Incentive Programs in Healthcare discussion assignment

Each reply must be at least 450 words a peice. Each thread and reply must contain at least 2 references and 1 instance of biblical integration. Current APA format must be used.

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classmate #1-

Colossians 3:23 says, “Whatever you do, work heartily, as for the Lord and not for men.” As a part of quality assurance, the government has instilled various programs as incentives for various health care facilities and health care professionals. Like the Meaningful Use program, other programs that are offered by the government “look to incentivize healthcare providers through demonstrating the delivery of quality healthcare and a commitment to quality patient outcomes” (Harrington, 2016, p. 269). Holmstrom (2017) reported that an incentive program or system that is properly designed will consider the full collection of services that a healthcare provider or facility “can engage in, the array of instruments, many nonfinancial, that are available to influence individuals and consider the factors that motivate them in different settings” (p. 1735). Two of the incentive programs that we will look at further are the Pay-for-Performance (P4P) program and the Value-Based Purchasing (VBP) program. Both programs are based on quality care, but P4P deals with healthcare providers while VBP deals with acute care hospitals.

Up until the 1990s, healthcare providers were reimbursed based on a fee-for-service system. Entering into the 1990s, healthcare payers shifted to a managed-care approach that included primary care physicians and case managers. With the continued escalating healthcare costs with little to no improvement in the quality of healthcare services, the P4P payer system was introduced in the early 2000s. When healthcare providers meet or exceed agreed-upon quality measures or performance goals, they will be provided with a bonus from the P4P program (Harrington, 2016). Healthcare providers can also be penalized for not providing quality care, not reducing healthcare costs, and even performance that is not improving. This places pressures on the healthcare providers to ensure that any healthcare services provided to patients are “safe, effective, patient-centered, timely and efficient in its delivery, and equitable for the patient” (Harrington, 2016, p. 271). Quality measures that are imposed on healthcare providers are categorized as process measures, outcome measures, patient experience, and structure measures. P4P payments to service providers are then calculated based on services rendered, the quality of services, and efficiency measures. Harrington (2016) stated that the overarching goal for the P4P program is to accurately align both the incentive program itself and the payment to providers’ processes and goal in order to eventually “produce better outcomes for the patient that will ultimately result in lower costs for the payer, provider, and patient” (p. 273). In comparison, the VBP program bases its program on a majority of the same provisions, but the program operates and requires different measures to differentiate warrant of payment. Incentive Programs in Healthcare discussion assignment

The VBP program is an initiative by the Centers for Medicare and Medicaid Services (CMS) “that rewards acute-care hospitals with incentive payments based on the quality of care that they provide to the beneficiary/patient that is on Medicare while in” the health facilities care (Harrington, 2016, p. 274). The VBP program essentially rewards healthcare providers for delivering both quality and efficient clinical care. The VBP program can be complex but basically, any incentive payment is based on how well inpatient healthcare services perform based on each measure or on how much improvement, or lack thereof, has been made in that specific area since the previous measurement or baseline period. Just as in P4P, there are a handful of quality domains that hospitals are measures on, these include—the clinical process of care, patient experience of care, outcome, and efficiency. Any healthcare facility that participates in the VBP program is not only under a microscope, so to say, but also their performance is completely transparent to the public. Information gathered on a hospital’s performance in the VBP program is posted periodically for public review. This information includes “the hospital’s performance on each measure that applies, the hospital’s performance on each condition or procedure, and the hospital’s total performance” (Harrington, 2016, p. 278). Chee, Ryan, Wasfy, and Borden (2016) reported that VBP programs “will play a significant role in healthcare delivery for years to come, and they will serve as an opportunity for providers to build the infrastructure needed for value-oriented care” (p. 2197). Both the VBP program and the P4P program have initiated measures for improving the quality of healthcare services and healthcare professionals’ performance, while aiming at reducing healthcare costs. The overall impact of both the P4P program and the VBP program on any healthcare organization that is participating is that the overall financial health of the healthcare organization is directly affected by any unfavorable outcomes.


American Bible Society. (2000). The holy bible, containing the old and new testaments.

Chee, T. T., Ryan, A. M., Wasfy, J. H., & Borden, W. B. (2016). Current state of value-based purchasing

programs. Circulation, 133(22), 2197-2205. doi:10.1161/CIRCULATIONAHA.115.010268

Harrington, M. K. (2016). Health care finance and the mechanics of insurance and

reimbursement. Burlington, MA: Jones & Bartlett, 2016. ISBN: 9781284026122.

Holmstrom, B. (2017). Pay for performance and beyond. American Economic Review, 107(7), 1753-1777.

doi:10.1257/aer.107.7.1753 Incentive Programs in Healthcare discussion assignment


classmate #2-

The U.S. health care delivery system does not provide consistent, high quality medical care to all people (Institute of Medicine, 2001). Americans should be able to count on the quality of care they pay for, as to meet their needs and are based on the best scientific knowledge (Institute of Medicine, 2001). To initiate process of change in the area of quality, there is a need for changes in the areas of applying evidence to health care delivery; using information technology; preparing workforce; and aligning payment policies with quality improvement (Institute of Medicine, 2001).

It has been widely adopted by health care providers, and it seems it would improve the quality of care, however, research finds very mixed evidence of that result, as there is no evidence between P4P and actual improvement of quality, nor the evidence exists that hospitals, which improved in some areas, were able to sustain the improvements (Warner et al., 2011). Studies from U.S. fail to find any improvements made in care process, however, the P4P did decrease readmission rates for Medicare beneficiaries (Mendelson et al., 2017).

The Hospital Value Based Purchasing (VBP) Program is a CMS initiative that rewards acute care hospitals with incentive payments based on the quality of care that they provide to Medicare beneficiary under their care (Harrington, 2016). The VBP was established under the ACA in 2010 and begun applying its payments for the fiscal year 2013 and had an impact on 2,985 hospitals across country (Harrington, 2016). There are about 3,000 hospitals across country that are eligible for VBP (Harrington, 2016), which are penalized or rewarded based on how well they perform on certain quality measures. VBP refers to a set of performance-based payment strategies that link financial incentives to health care providers’ performance on a set of defined measures to achieve better value (Damberg et al., 2014). VBP program excludes some hospitals that do not have a minimum number of cases from participation, like psychiatric institutions, oncology centers, or pediatric facilities; and hospitals that do not participate in the Hospital Inpatient Quality Reporting Program (Whitman, 2016). This year, CMS announced several changes to VBP, introducing four domains on hospital scores, with patient and caregiver centered experience and care coordination; safety; efficiency and cost reduction, removed two measures from clinical care and added a care transition dimension (Whitman, 2016).

Past decade has been a one big experiment with pay-for- performance payment systems, primarily with P4P. However, we still know very little about how to design and implement VBP programs to achieve stated goals and what constitutes as a successful program (Damberg et al., 2014). As of today, hospitals are assessed based on comparison to its peers and its own performance over time. According to research, about 1,600 hospitals will see bonuses from Medicare in 2017 under VBP (Whitman, 2016). The lowest performing hospitals will see a reduction in DRG payments of 1.83%, and the highest performing hospitals will see an increase of more than 4% (Whitman, 2016). Compering numbers of hospitals from 2016 to 2017, numbers of hospitals that payments were deducted grew from 1,236 to 1,343, accordingly (Whitman, 2016). According to researchers and critiques of VBP, this design has a flow, as it set up as a tournament style, in which hospitals are stacked up against each other, and really do not know how they perform until very end (Whitman, 2016). With this year’s changes in major domains on which hospitals are scored, we will gain new perspective on how progress on quality can be accelerated when pay-for-performance programs reward both achievement and improvement (Whitman, 2016). Incentive Programs in Healthcare discussion assignment

Since we are discussing pay for performance programs, I thought it was fitting to talk about earthly rewards. In the bible there is a scripture that says, “whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ” (Colossians 3:23-24, NIV). Everything that we do as healthcare administrators we should look at it as a service to the Lord. We should do it gladly and to the upmost of our ability. We are his servants as we do his will on earth the reward is the individual that we bring to Christ just based on our day to day operations. The pay for performance program is set up the same way as the bonus or reward is based on exceeding the quality standard that is set.


Damberg, C., Sorbero, M., Lovejoy, S., Martsolf, G., & Mandel, D. (2014). Measuring

success in health care value-based purchasing programs: Findings from an environmental scan, literature review, and expert panel discussion. RAND Health Quarterly. Vol. 4, No. 3. Retrieved from:…

Harrington, M. (2016). Health care finance and the mechanics of insurance and reimbursement.

J&B Learning.

Institute of Medicine. (2001). Crossing the quality chasm: A new health system for the 21st

century. National Academies Archives. Retrieved from:…

Mendelson, A., Kondo, K., Damberg, C., Low, A., & Kansagara, D. (2017). The effect of P4P

on health, health care use, and process of care: A systematic review. Annals of Internal Medicine. Retrieved from:…

Warner, R., Kolstad, J., Stuart, E., & Polsky, D. (2011). The effect of P4P in hospitals: Lessons

for quality improvement. Health Affairs. Vol. 30, No. 4. Retrieved from:…

Whitman, E. (2016). Fewer hospitals earn Medicare bonuses under value-based purchasing.

Modern Healthcare. Retrieved from:…

Incentive Programs in Healthcare discussion assignment


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