Value-based purchasing (VBP) is a Medicare system of payment aimed at provision of better quality outcomes as compared with quantity. Furthermore, in VBP system hospitals are given incentives according to performance as measured within a specific period. The system motivates hospitals and health centres to focus on quality service and safety care, and this influences various aspects namely: reduction of errors, evidence-based practices, reduction of infections, reducing costs, and improvement of processes. Notably, Value-based purchase emphasises on quality of service care and procedures but not quantity.  The United States health care system has adjusted to embrace VBP and move from fee-for-service due to unstable economic environment and recession. The US government enacted and ratified Affordable Care Act that guarantees better, effective and affordable care to the people. All health institutions and providers were required to demonstrate to stakeholders (payers, government and public) that they comply with the VBP and care act of safe, better quality and reasonable cost. The VBP was following principles of healthcare financial and business management, again ethical and legal principles of management of healthcare institutions paramount for realisation high quality, affordable care. Therefore, in the new system healthcare organisations have a choice in the service provider but carefully manage business costs and proper financial reimbursement.

Furthermore, the VBP system is modelled in such a manner that it stimulates maximum healthcare to Medicare consumers, and hence the consumers to make a payment equal to the services they receive. Consequently, the healthcare providers rewarded per quality of work offered not quantity. Again the quality of work is measured by the level of patient satisfaction parameters including but not limited to: service urgency, information adequacy, the rate of recovery, integrity and dignity of interaction with healthcare providers, payment for service and freedom of expression, and post service complications.

The Hospital Value-based purchasing program started within a Deficit Reduction Act of 2005, part 5001 section (b) that mandates Health and Human Service Secretary to formulate a methodology for execution of VBP from 2009 targeting Medicare healthcare institutions as provided in subsection (d) for Inpatient Prospective Payments Systems (IPPS). The program harmonises various aspects of healthcare processes namely: identification selection and development of efficient and quality inpatient services; Collection, justification and reporting of quality data;size, structure and value-based adjustments; honest information on the performance of an institution. The principles aim to ensure satisfaction to the service provider, beneficiaries and the Medicare and Medicaid Services.

St. Vincent Hospital Indianapolis is one of the most extensive healthcare facilities in Indiana. The facility performs three adult conditions and procedures. St. Vincent is a surgical and medical facility in addition to being a teaching hospital. Notably, the Indianapolis health facility makes part of Ascension Health, a most prominent non-profit Catholic healthcare. The organisation founded on the basis faith approach to healthcare with a slogan “caring spirit”. The hospital established in 1878 by Bishop Francis Silas and has undergone transition till being the best healthcare institution in areas such as stroke, gastrointestinal, and cardiac, orthopaedic. The facility is also excellent in joint replacement surgery. The U.S Department of Health and Human Services awarded the organisation with Medal of Honor for exemplary services and upsurge organ donation.

Besides, the St Vincent hospital has several facilities around various locations in Indiana counties such as Anderson, Frankfort, Kokomo, Carmel, Indianapolis and Elwood. The hospital offers a wide range of community outreach services including First Aid training and parenting courses. The hospital supports annual events aimed at creating awareness about health. Since the hospital is faith-based, it encourages patients to persevere illness and diseases through religious care.

VBP shifts paradigm from fee-for-service to quality based healthcare system whereby best performers rewarded. For instance, Centres for Medicare and Medicaid Service (CMS) Hospital Value-Based Purchasing system. The system typically utilises a financial reward to motivate actors in the industry for better performance.  The VBP program reimburses healthcare providers payment equal to the level of service quality offered, and this significantly improves treatment experience for the patient in the United States. Again, before reimbursement, CMS considers patient satisfaction reports from surveys and how the organisation is prepared to comply with the established best healthcare practices.  The following are five benefits of VBP to patients

• Reduces Costs: The underlying value of VBP is that patients can hold providers accountable for service quality and costs. The VPB system harmonises information about the cost of medical and patient outcomes in an actionable and meaningful manner. The results of value-based purchase plans aim at satisfaction with insurers, improved healthcare services and capacity building for a competitive edge.
• Enhances Patient Satisfaction: The VBP aims at decreasing medical errors and rewarding best performers. Research shows that a reduced incentive deteriorates the quality of healthcare. Patient satisfaction is paramount when administrators measure organisational performance. A VBP program causes patient satisfaction with service delivery and care plans.
• Decreases Medical error: Healthcare insurers and sponsors are more concerned with medical mistakes, and they have discovered a significant amount of funds are channelled to the malicious treatment program. Consequently, medical insurers have adopted insurance packages that reward care providers with incentives through value-based purchasing and this reduces medical errors. The new system has led to improved performance with the best quality healthcare services and cut costs.
• Informs Patients: Since enhanced healthcare experience attracts patients, the CMS strategy of incentivising organisations through the value-based purchase has been successful in attracting and retaining patients. Successful healthcare providers deliver patient-centred services. Also, they deploy emerging technology to gather adequate healthcare information, conduct disease preventive measures to protect people, and optimise incentives accrued from well-coordinated healthcare service.
• Enhances Healthy Habits: some habits such as overeating, smoking, excessive intake of alcohol causes lousy employee health. Majority of insurance buyers tend to adjust their behaviour to fit recommendations of the insurer, and this reinforces healthy habits. Again, when employees rewarded for conforming to health habits such as weight loss and not smoking, it potentially improves individual health in addition to reducing the healthcare costs. This habit generally results in all stakeholder financial savings and better employee health. In a nutshell, successful body wellness processes cause improved health for employees, and the employers incur reduced medical costs.

 

 

A1. Degree of VBP Implementation at St. Vincent Hospital.

St. Vincent Hospital Indianapolis had mixed reaction concerning the VBP idea, as some quarters of the institution resisted the new program while others embraced. The resistance was due to a failure to involve the members in the implementation of the program. Consequently, the American Hospital Association (AHA) intervened to evaluate the program based on the hospital dedication to improve the daily safety and quality of healthcare. The AHA established the Hospital Quality Alliance (HQA) to instil transparency in the program. All hospitals provide HQA with quality care information of specific clinical procedures.St. Vincent Hospital agreed with principles of HQA to ensure effective implementation of the Centre for Medicare and Medicaid Services VBP. The following are principles for implementation of VBP in the hospital

1. Linking of healthcare, Hospital and incentives of other providers. The hospital pays particular attention to the formulation of performance indicators across departments, which spearhead improvement to a common goal and desired performance modifications.
2. Creation and development of incentive initiatives which employers, healthcare providers and CMS would consult formulate a shared, parameter and payment methods, objective and minimise multiple requests for data and information.

• VBP should generally aim at improving performance as far as patient safety and quality are concerned but not reducing cost by CMS. Also, the principle states since cost factor is affected by both external and internal factors payment of incentives must not reward performance that is based cost of services offered.

1. Incentives and reward on performance should only motivate and influence the behaviour of healthcare providers devoid of putting them at risk.
2. Incentives should be implemented gradually
3. The program should be designed in such a manner to reward quality improvement and quality retention, and this motivates that those hospitals were improving quality and those that have reached the recommended threshold. This scenario imparts the sustainability of the quality of the program.

• Parameters for assessment of quality and performance should be created in a free, fair, open and agreeable selected process to streamline measurement, performance and reporting.
• Parameters utilised in the measurement of performance should be testable, evidence-based and feasible. Therefore reliable and valid parameters should be applied for testing in the field.

1. The measurements done should reflect and identify differences in, patients, healthcare facilities, and significantly reduces biasness.
2. Care must be taken to ensure the measures done should not jeopardise the institutionalised healthcare disparities.

The HQA principles outlined above precisely reflect the position of St. Vincent Hospital and also partly AHA. Also, the principles streamline the status of CMS about VBP for an advanced quality program.

The United States’ Health Department has strived to advance the VBP implementation efforts in the healthcare environment across the states. The efforts aim to meet the requirements of patient protection act 2010. Notably, the policymakers challenged with many policy decisions that sometimes derail the formulation of robust design for proper VBP implementation to achieve intended objectives. The hospital will develop a strategic plan to shift healthcare services from fee-for-service to value-based purchase system. Despite the challenges the hospital has, implementation of VBP is the only long-term solution for human resource wastages, poor performance and focus on financial outcomes.The new system is wholesome and comprehensive with justice for all stakeholders.(Koltov & Damle 2014).

1. Creation of Strategic Plan

Currently, my organisation is not adequately prepared to adopt value-based purchasing, in a sense the facility not adequately staffed and the funds needed to fill the deficit for delivery of quality services is very limited. Furthermore, human resource is key to proper implementation of the VBP program. Nevertheless, this situation cannot hinder the successful implementation of the VBP program. The program can start with the provision of quality services to medical departments with adequate physicians and resources since some departments are well-staffed with enough resources. After the departments with a deficit of staff and resources can follow as the organisation gradually adjusts. Before implementation of the VBP program its crucial to enlist significant stakeholders who will play a critical role in the successful service delivery in the new system.

St Vincent Hospital has major stakeholders who assist in the successful delivery in the new system. First, patients are the essential stakeholders since the services targets to make them satisfied. Patients must be pleased with the system because they are clients to boost profit margins. Furthermore satisfying the desire and needs of patients is the sole way for profitability. Healthcare providers or physicians also form part of important stakeholder in the VBP system, healthcare providers application of their professionalism and diligence at work can convince patients to stick the facility concerning acquiring healthcare services. Physicians play a significant role in the retention of patients (clients), good services attract and retain patients.Rating and judgment of any healthcare institution majorly rely on physician professionalism. Organisational board members or directors are also important stakeholders. Board members includeinvestors who invest their money in the facility to make a profit. Top managers even for part of stakeholders as they supervise and direct operations in the organisation.  Successful implementation of VBP programs requires departmental statements outlining how to handle the different stages and steps simultaneously without overlapping of duties and responsibilities. Again, developed departments help to differentiate duties from each other, and every department should write guideline of its obligation to avoid overrunning others.

For example, the three central departments at St. Vincent Hospitals include; human resource, administration and medical department, other include risk management, case management, marketing, public relations department.

B1. Departments Impacting VBP

For St. Vincent Hospital to successfully implement the VBP plan departments should work within their stipulated mandates effectively. All departments play a role in the successful delivery of healthcare services, and they interdependent. However, some departments can exist without the other. Generally, the implementation of a VBP program cannot succeed if some departments do not function properly. For example, the medical department plays a vital role in data collecting, measuring and reporting of performance of an organisation as far as quality care is concerned.To ascertain the closeworking relationships of the departments is that the medical departments depend on the HR department to attract the most efficient human resource to the medical department such as professional nurses. Furthermore, the medical department relies on administration department to coordinate the VBP activities of all departments towards a common objective.

B1a. Departmental Role and Functions

Typically our hospital has several departments but the key departments that strongly influence the VBP include; Human resource, Administration and Medical departments.

Human Resource Department

Human resource departments tasked with selection and recruitment of talented personnel most suitable for the diverse specialities associated with VBP program operation and management. The HR selects recruitment criteria and process that would appoint the most efficient and highly productive personnel. Furthermore, the human resource protects promotes and applies procedures and policies to safeguards employee rights and interests as they execute the VBP program (Maenhout and Vanhoucke, 2013). Again, the HR department’s updates on the current working techniques that are in line with accepted and approved modern technologies to meet high standards as stipulated under the VBP program by the CMS. The HR also safeguards employee or client privacy and confidentiality. Generally, HR looks at general human welfare with the aim of maximising productivity.

Administration Department

Administration department mandated with the day-to-day running of the hospital, and this means that the administrator is the determinant of the overall performance. In the VBP program administration department is tasked with procedures, policies and follow up plans for high-quality health care program. The department also charged with the coordination and supervision of the VBP program in tandem with CMS. Finally, the administration is responsible for conducting a hospital transaction with CMS.

Medical Department

The number of medical departments in a hospital depends on its size and capacity, whereby large hospitals comprise of many medical departments and vice versa. St. Vincent Hospital has seven major medical departments namely;

• Outpatient
• Nursing
• Surgery
• Paediatrics
• Neonatal/maternity.

The above departments play different roles ranging from administering treatment, handle casualties, and conduct specialised and general surgeries, diagnosis, drug prescription, clinical assessment, referrals, nursing and many more. Furthermore, the above departments are the core platform for VBP incentives payment or penalty placement. According to CMS, the performance of the department is the parameter at which different measures are taken. Departments play a critical role in the VBP program because patients are received and treated in the process of provision of healthcare service.

 

B2. Department Goals.

The identified departments should prioritise goals that will facilitate the effective implementation of the VBP program. The medical departments’ employees will deal with most activities since our organisation is a healthcare facility. The HR and administration departments will ensure human resources are attracted, hired and motivated in the organisation to guarantee productive workforce whose performance output is excellent. Furthermore, the value-based purchasing program promotes better services through incentivising and rewarding providers with outstanding performance(Ryan, Sutton & Doran 2014).

Again, the staff should understand the whole idea of value-based purchasing in the sense that there are metrics that goes past the quantitative measure of healthcare. Generally, the VBP idea targets the entire healthcare population and get their perceptions concerning healthcare cost, quality of healthcare service, patient readmission and patient satisfaction.  With the adoption of VBP program our hospital should check off on quality level concerning established benchmark. The organisation should also ask a question such as Have patients received medication at the right time? Did healthcare managers follow-ups on their patients? What is the rate of patient readmission to the facility? The staff should understand the parameters of quality care provided for example the VBP will focus on the reasons for patient readmission to the facility. The value-based purchasing system, the staff knows how to satisfy a customer and go beyond concern and goal. The VBP directly connected with payment models(Yokoe et al. 2013).

Human Resource Department

In line with VBP HR carry out the following responsibilities

1. Attract and recruit the most effective and efficient human resources that best suits the related VBP specialities, management and operation of the program. As a result, CMS is achieved and through enhanced performance.
2. To update the VBP workforce with emerging approved and acceptable work techniques, and this ensures efficiency and stay relevant in the fast-changing world.

Administration Department

An administrator should set clear goals which includes

1. Implement policies, plans and procedures aimed at better healthcare in St Vincent Hospital. These goals will ensure healthcare centres work towards meeting the recommended standards those harmonies and motivates stakeholders for effectiveness and efficiency.
2. Coordinate the hospital and the CMS on the VBP subject. Lack of proper coordination can lead to employee misunderstanding of VBP concept, and this may result in the rejection of the whole idea.

Medical Departments

The general goals of medical departments are to offer medical services to patients with efficient techniques and within a short period possible. Additionally, the primary facility values upheld in the provision of medical services. Finally, the medical departments must embrace quality in their services as compared to the quantity to attract high incentive payments.

 

 

B3. Attaining Quality

Administration utilises right policies, plan and procedures as a tool for implementation and realisation of quality outcomes. The programs, policies and procedures are tailored to meet particular quality. The processes would mean that patients are provided with high-quality healthcare services to guarantee the payment of incentives. Again, there should close coordination and linkage between hospital and CMS for timely accurate reports to facilitate appropriate reimbursement. Attraction, recruitment and retention of effective and efficient human resource translate to better performance, and best quality services for patients translates to reward of performers with incentives.

Furthermore, recurrent and timely training of employees on new techniques implies that a hospital has a competitive edge and many patients would be attracted to the facility. Quality and affordable medical service to the patients is the best way of gaining customers’ trust. All these strategies collectively ensure customer satisfaction and ultimate reimbursement by the CMS programs. Again, prioritising quality over quantity streamlines work in line with CMS goals on VBP. As long as the quality maintained VBP is attained.

 

B4. Critical Key Points

The medical staff should correctly understand critical issues about CMS for smooth implementation of the program. First, the reward system based on the following factors;

1. The level of quality healthcare services offered to Medicare and Medicaid patients.
2. Close adherence to the best medical/clinical practices.

• The level at which hospitals enhance the experience of patients when they seek healthcare services in hospitals.

On the other hand, the medical staff must understand that CMS rewards hospitals with incentives by the following factors.

1. The level of organisational performance on every measure.
2. The degree of improvement on each measure as compared with the performance of the baseline period.

Lastly, the medical staff must also understand that the four domains reflected by the CMS namely;

1. Clinical care: Healthcare is measured at 5 per cent, whereas outcomes weighed at 25 per cent.
2. Patient care experience in line with the HCAHPS survey weighed at 25 per cent

• Safety measured at 20 per cent.

1. Medicare spending/ Efficiency for every beneficiary measured at 25 per cent.

 

B4a. Marketing the Key Points to Staff

Staff understanding of the whole VBP idea and embracing it is determinant to the success of the program. Misunderstanding leads to resistance and even sabotage; therefore exemplary strategies should be deployed to make the whole process a big success. For instance, some of the popular approaches include workshops and seminars. Seminars and symposia present an ideal platform for CMS to explain and persuade the staff the entire ideas of VBP, implications to hospital, staff and patient, and measures utilised. Hospitals administration can also arrange for workshops and seminars for regular training of themes touching on best clinical practices, improvement of patient healthcare experiences, measurement and methods of improvement during the measurement baseline period. Again, the hospital can plan and hold departmental meetings at which points disseminated to the individual staff members of the particular department. Administration can also distribute more information to the employee through emails, which they can read at their own convenient time without interrupting standard programs. Email is a typical means of communication top-down in the organisation in the digital era, as the records kept for future reference. Finally, hospital administration can arrange for inter-departmental review and appraisal to foster hard work towards high performance.

B5. Clinical Ethics and Ethical Business Practices

Ethical clinical and ethical business practices among the staff are paramount for the achievement of objectives of VBP. The team must strictly adhere to the ethics of clinical practices. The primary clinical ethics is ensuring that the patient is made comfortable and his/her interests are given priority.

Additionally, the healthcare providers must understand that the organisations is in business hence competition is inevitable, therefore to stay ahead of competitors an organisation always offer high-quality services to attract and retain customers(Claiborne, Hesse & Roble 2009). Healthcare has adopted radical changes shifting to quality and value-based services as compared with a quantity based. One of the noticeable difference is that the VBP program that aims at a reduced cost of care, a decrease in medical error, improved healthcare service, reduced readmission rate, and improved healthcare perception. A study indicates close relationship the elements evaluated in VBP and the clinical environment. According to ANA ethics and code of conduct, the VBP aspects that related to nursing practice environment should be done by a trained medic in strict observation to ethical and moral obligation to provide patients with maximum quality care.

An organisation with professional clinical staff has a high probability of meeting the set standard clinical environment and ethics of the industry, unlike an organisation with untrained or paramedics.  Some organisations utilise compliance policy guide to act as a moral guide, and this does not guarantee success (Butts & Rich, 2008).

Ethical practices stipulate on the confines in which certain operations are conducted(Bowen, 2016). Our organisation should uphold two central business ethical practices; compliance and dealing with suppliers. However, the other essential requirement for successful implementation of the VBP program, and compliance is to ensure all employees exercise utmost diligence, honesty, integrity, caution and fairness. Furthermore, the hospital will liaison with suppliers to develop, sustain a robust supply chain that augments all the critical areas of healthcare services (Maile et al. 2016).

Second clinical, ethical practices composed of

1. Autonomy: This is the freedom and opportunity accorded to patients to refuse to accept any action done to him/her.
2. Capacity/ Competence: Making sure that a patient has the capacity and competence to make a decision on own, whereby in case incapacitation or minor somebody should trust should make decisions on behalf.
3. Beneficence: The fact that a physician should always be inclined towards doing good for the patient but not harm.
4. Informed Consent: This is the provision of adequate information to a patient to enable him/her to make an informed decision concerning an issue.
5. Surrogacy: This is the seeking for another person close to the patient to decide on behalf of a patient in case patient is incapacitated.
6. Fidelity: The act of physician keeping the trust and confidence of the patient.

To incorporate the ethical issues into VBP implementation, HR department of the hospital should recruit most qualified and talented human resources to motivate and provide training and regular capacity building, and finally, the person should take an oath of allegiance to the organisation. Finally, to boost performance, the hospital will establish appraisal system to reinforce compliance with the ethical policy. An organisation should promote ethical leadership that allows ethical interaction and collaboration among the healthcare team to meet the needs of team members and patients. Close, ethical and harmonious interaction supersedes compliance policy and results in enhanced reimbursement for an organisation, and these benefits all.

B6. Coordinating Events for the Departments

Proper coordination of both educational and informational event for the three departments identified; medical, HR and administration, the hospital will involve the various head of departments. The head of a department is mandated to handle information. In educational and capacity building issues still, the leader of departments can organise and appoint an individual to take charge of an educational program, and liaison with various departments to implement in avenues such as workshops, seminars and vocational training.

For successful implementation of the value-based purchase program, it’s vital to coordinate educational and informational events of the departments. In this case, members from all departments are summoned, and the education or information program and they get involved in the planning. For instance, if an educational program organised for the medical department, all physicians and nurses should attend the event because the particular department takes care of physician welfare. A workshop held for the event and physicians from other organisations that have successfully implemented the VBP program to attend the event. Peer-to-peer learning is useful as the physicians will provide practical scenarios to their counterpart as well as success techniques and pitfalls to avoid in the implementation of the VBP system. Coordination can be beneficial if the admin has the charisma and ethical leadership.

B7. Timeline

The three-year timeline ensures that the departments work towards a standard plan. A schedule also helps to fast-track project in a realistic and time-conscious manner. Therefore I will develop a timeline for St. Vincent Hospital in the VBP implementation for the next three years. The timeline will involve baseline and performance period for VBP plan. In the first year, the medical department will conduct a safety assessment issue of the program, whereby data collected from a survey will be used to inform of the current state of healthcare. The first also will information from stakeholder on the expectations, the cost of the program, and other cost-benefit activities of the plan. The second year will involve detailed analysis of the VBP healthcare plan in which various informational and educational events will be conducted to stakeholders and also the departments. Every stakeholder and departments will understand how the new program intends to operate and affect them.

Most importantly efficiency will is the desired outcome and will be measured based on value addition to the organisation. System testing conducted in the first four months of the third year and the physicians will check on whether the departments have embraced the VBP system. Patient experience will be sought to ascertain the objectives of the program. Finally, the new system will be implemented according to VP plan (Kavanagh et al. 2012).

 

Implementation Area(Domain)	Baseline Period	Performance Period
Safety	April 2019–April 2020	Feb 2020–Dec. 31, 2020
Healthcare	March 1, 2019–March 30, 2020	June 1, 2019–June 30, 2020
Cost Reduction/ Efficiency	Feb 1, 2019–Feb 1, 2020	March 1, 2020–Dec. 31, 2021
HealthCare Coordination/Patient-centered experience	Feb 1, 2019–Feb 1, 2021	April 1, 2021–April 1, 2022

 

 

 

Conclusion

The business plan for St. Vincent Hospital is comprehensive for successful implementation of VBP plan. In the effort of encouraging adoption of VBP programs, many health advocacy organisations in the U.S. have invested in the mobilisation towards value-based purchase. The New York State Health Accountability Foundation facilitated for the creation of Abou tHealth Quality, a website platform on which people could check and compare the rate of performance for all healthcare providers in the New York State. Another agency the Pacific Business Group on Health (PBGH) conducted a healthcare consumer survey to assess the current health status. Notably, the organisations gather and evaluating survey data to draft Physical Value Check Survey annual report. The published report measures factors such as healthcare service quality and patient satisfaction. Finally, a VBP initiative promotes tailored healthcare services to the target population and encourages organisations that provide health services to meet the required standards. Once organisations comply with value-based purchasing plans, patients are attracted to utilise the best quality services offered. Administrators play an integral role in coordinating actions towards a standard service delivery which promotes population well-being.

 

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