Report card day carries with it the possibility of students being grounded or applauded. "Report cards" for hospitals will affect their bottom line.
Beginning in October as part of the Affordable Care Act, hospitals in the U.S. will participate in value-based purchasing. It links hospital outcomes and quality of care for patients to the reimbursement hospitals receive from the government for Medicare.
Diagnosis-related groups — patients grouped together based on similarities such as diagnosis and therapy — are used to determine how much each hospital is reimbursed for specific procedures. Flint said DRG payments will be reduced by 2 percent by 2017, and that money will go into a pool. The pool of money then will be disbursed to hospitals depending on how they score on 17 process-of-care measures and eight patient-care measures.
"The idea is (members of Congress) want the government to be prudent purchasers on behalf of Medicare beneficiaries," said health policy expert Samuel Flint, associate director of the School of Public and Environmental Affairs at Indiana University Northwest.
Hospital performance will be reported publicly for heart attacks, heart failure, pneumonia, surgical care, health care-associated infections and patients' perception of care, according to healthcare.gov.
States, hospitals and physicians are tasked with carrying out the legislation despite the 26 federal lawsuits seeking to overturn it and the U.S. Supreme Court's announcement it would hear an appeal from Florida.
"So much of the Affordable Care Act has a cluster of financial incentives," Flint said. "The notion is if you do it right the first time, it will really decrease health care costs."
Barb Greene, president of Franciscan Physicians Hospital in Munster, said the hospital has been working on how to tackle value-based purchasing for the past three years.
"In some respects, it's a good thing," Greene said. "There isn't an industry that doesn't have quality indicators or quality programs. I think where we're concerned is when the reimbursement hits, we don't have total control over the patients or the physicians."
John Gorski, chief operating officer of Community Healthcare System, which includes hospitals in East Chicago, Hobart and Munster, said the system's three health care centers have had most of the quality indicators in place for awhile, but there is some reimbursement at risk. Still, he said, over the past few years, even before the Affordable Care Act, the system raised its patient satisfaction levels from 18 percent to 80 percent.
"It's ingrained in the employees," he said. "We feel comfortable and confident for all three hospitals. ... It's just the bar keeps changing."
Franciscan Physicians Hospital, Community Healthcare System and Methodist Hospitals have been monitoring current scores on a monthly basis to have an idea of the benchmarks they'll need to hit to get certain levels of reimbursements.
Matt Doyle, chief financial officer at Methodist, said his initial reaction to value-based purchasing wasn't positive, but he acknowledged that health care was on "an unsustainable path" and action was needed. Doyle said the hospital's electronic medical records system will help the quality of care.
"At the end of the day, we feel like it's something we're on board with because we understand the intent is to improve quality and have facilities be responsible for their levels of care and the end result," he said.
Greene said some of the questions patients will be asked about their care are poorly worded, making it difficult to score high in certain areas.
"I don't know that patients realize how important it is for them to complete the surveys and get them back," she said. "And if something is wrong, bring it to the management's attention. Many times we don't know they're upset until they leave."
