May 02, 2011

Paying Hospitals for Quality Care

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By Don Berwick, Administrator, Centers for Medicare & Medicaid Services. Crosspost from

America has a skilled health care workforce and great hospitals. Every day, our health professionals are committed to improving care processes and systems for patients. Health care professionals have been encouraging Medicare to update payment procedures for a long time; validating the quality of care they provide to patients over the quantity. By improving transparency, we are envisioning a health system where all Americans get the best possible care. So how will your doctor, your hospital, and Medicare align to fight disease and provide you with the best possible care?

Today, the Department of Health and Human Services (HHS) announced the Hospital Value-Based Purchasing Program, created under the Affordable Care Act. This program provides hospitals with incentive payments based on their performance on a number of health care quality measures. These quality measures include:

  • How quickly do heart attack patients receive potentially life-saving surgery?
  • How often do patients with heart failure get the discharge instructions they need to help them care for themselves?
  • How satisfied are patients with their experience of care at the hospital?

This is an important national initiative that will give hospitals greater financial incentives to continually improve how they deliver care. The better a hospital does on its quality measures, the greater the incentive payment it will receive from Medicare under the initiative. This will help improve the odds that every patient receives the best care, regardless of the location of treatment. It also encourages “patient-centered” care. The Hospital Value-Based Purchasing Program captures information about patient satisfaction with their care. It asks the important questions about how well hospital staff communicated with patients during and after a hospitalization and the overall cleanliness of the hospital environment.

As the largest payer for hospital services, Medicare is in a special position to reward hospitals for looking for ways to improve how a patient experiences an inpatient stay. The new program encourages hospitals to adopt practices that have been shown to be effective in improving patient outcomes. Equally important, it will be looking very carefully at whether the patient feels that he or she has been treated with respect and compassion, and has been given the opportunity to participate in decisions about treatment.

Are you wondering how your local hospital measures up? Well, you can head to to find the Hospital Compare Care Quality tool to find out how hospitals across the country are doing on 44 different care quality measures.

The Hospital Value-Based Purchasing Program is just one part of a broad-ranging effort by the Obama Administration to improve the quality of health care for all Americans, using important new tools provided by the Affordable Care Act – including the Partnership for Patients.

Through this program, Medicare is helping to improve patient safety and quality of care. The time has come for all of us to be on the same page and distinguish adequate care from excellent care. This payment plan places the patient at the center of care. Hospitals are now paid for how well they provide care, and more importantly, how well the patient does under their care. Together with our vigilant healthcare work force, hospitals will be able to continue to find ways to provide even more excellent care to every one of their patients.

To learn more about Hospital Value-based Purchasing, please visit this page.