Race to the Top of the Hospital Value-Based Purchasing Program

EXECUTIVE SUMMARY Medicare’s Hospital Valued-Based Purchasing (HVBP) program measures hospitals’ total performance score (TPS); its measurement strategies have changed regularly since its rollout in 2013. Because the program influences care delivery, it is important to examine how the policy has changed hospitals’ behavior and how it may inform future policies. The purpose of this study was to assess the relationship between hospitals’ performance on TPS annually from 2013 to 2018 and organizational characteristics. Using the HVBP TPS from 2013 to 2018 and associated hospital characteristics—hospital size, teaching hospital status, system membership, ownership type, urban/rural location, average percentages of patients from Medicare and Medicaid, operating margins, percentages of inpatient revenue as a proportion of total revenue, and case mix index—we conducted a retrospective cohort study of all U.S. hospitals participating in the HVBP program. Regression and panel analyses found that organizations that were expected to have robust and rigid resources were unable to score in the superior category consistently. In addition, organizations were unable to consistently perform positively over time because of changes in the HVBP program measurement and the required organizational responses. Policymakers should consider the ability of organizations to respond to changes to the HVBP program. Likewise, healthcare managers, particularly those in larger organizations, should seek to remove bureaucracy or allow for greater resource slack to meet these changes.