Financial Performance of Hospitals in the Appalachian Region Under the Hospital Readmissions Reduction Program and Hospital Value‐Based Purchasing Program
Purpose The Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of...
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| Published in: | The Journal of rural health Vol. 37; no. 2; pp. 296 - 307 |
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| Main Authors: | , , , , |
| Format: | Journal Article |
| Language: | English |
| Published: |
England
Wiley Subscription Services, Inc
01.03.2021
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| Subjects: | |
| ISSN: | 0890-765X, 1748-0361, 1748-0361 |
| Online Access: | Get full text |
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| Abstract | Purpose
The Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States.
Methods
This study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference‐in‐difference model with hospital‐level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States.
Findings
After implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (−1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points).
Conclusions
HRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes. |
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| AbstractList | The Hospital Readmission and Reduction Program (HRRP) and Hospital Value-Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States.
This study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference-in-difference model with hospital-level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States.
After implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (-1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points).
HRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes. PURPOSE: The Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States. METHODS: This study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference‐in‐difference model with hospital‐level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States. FINDINGS: After implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (−1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points). CONCLUSIONS: HRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes. Purpose The Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States. Methods This study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference‐in‐difference model with hospital‐level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States. Findings After implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (−1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points). Conclusions HRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes. The Hospital Readmission and Reduction Program (HRRP) and Hospital Value-Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States.PURPOSEThe Hospital Readmission and Reduction Program (HRRP) and Hospital Value-Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States.This study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference-in-difference model with hospital-level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States.METHODSThis study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference-in-difference model with hospital-level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States.After implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (-1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points).FINDINGSAfter implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (-1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points).HRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes.CONCLUSIONSHRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes. PurposeThe Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by either rewarding or penalizing hospitals through inpatient reimbursement. This study analyzes the effect of both programs on profitability of hospitals located in the Appalachian Region (AR) compared to hospitals in Appalachian states and the rest of the United States.MethodsThis study used a retrospective research design with a longitudinal unbalanced panel dataset from 2008 to 2015. Hospitals participating in both HRRP and HVBP during this time frame were included in the study. A difference‐in‐difference model with hospital‐level fixed effects, controlling for hospital and market characteristics, was used to determine effects of both programs on profitability of hospitals serving the AR, Appalachian states, and the rest of the United States.FindingsAfter implementation of HRRP and HVBP, only hospitals located in Appalachian states experienced a significant decrease in operating margin (−1.14 percentage points). Unexpectedly, during the same time period, total margin increased significantly for hospitals located in the AR (1.05 percentage points), Appalachian states (1.71 percentage points), and the rest of the United States (2.38 percentage points).ConclusionsHRRP and HVBP financially incentivize hospitals to focus efforts on improving patient care. The programs may not have the anticipated results. Increases in total margin for all hospitals during the study period indicate access to nonpatient revenues, offsetting the financial penalties from both programs. This revenue source may undermine the program's objectives of delivering value and achieving quality outcomes. |
| Author | Tilford, J. Mick Karim, Saleema A. Morris, Michael E. Chen, Hsueh‐Fen Nevola, Adrienne |
| Author_xml | – sequence: 1 givenname: Saleema A. orcidid: 0000-0002-8946-9897 surname: Karim fullname: Karim, Saleema A. email: skarim@uams.edu organization: University of Arkansas for Medical Sciences – sequence: 2 givenname: Adrienne surname: Nevola fullname: Nevola, Adrienne organization: University of Arkansas for Medical Sciences – sequence: 3 givenname: Michael E. surname: Morris fullname: Morris, Michael E. organization: University of Arkansas for Medical Sciences – sequence: 4 givenname: J. Mick surname: Tilford fullname: Tilford, J. Mick organization: University of Arkansas for Medical Sciences – sequence: 5 givenname: Hsueh‐Fen orcidid: 0000-0002-4066-6881 surname: Chen fullname: Chen, Hsueh‐Fen organization: University of Arkansas for Medical Sciences |
| BackLink | https://www.ncbi.nlm.nih.gov/pubmed/32613645$$D View this record in MEDLINE/PubMed |
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| Copyright | 2020 National Rural Health Association 2020 National Rural Health Association. 2021 National Rural Health Association |
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| Keywords | hospital value-based purchasing hospital readmission reduction program financial performance Appalachian Region geographical variation |
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The Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by... The Hospital Readmission and Reduction Program (HRRP) and Hospital Value-Based Purchasing Program (HVBP) propose to improve quality of patient care by either... PurposeThe Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by... PURPOSE: The Hospital Readmission and Reduction Program (HRRP) and Hospital Value‐Based Purchasing Program (HVBP) propose to improve quality of patient care by... |
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| SubjectTerms | Appalachian Region data collection Economics finance Financial performance Fines and penalties geographical variation hospital readmission reduction program hospital value‐based purchasing Hospitalization Hospitals income Inpatient care markets Panel data patient care Patients Penalties Profitability Profits Purchasing Quality of care Readmission Reduction Regions Research design Revenue rural health Rural health care Value |
| Title | Financial Performance of Hospitals in the Appalachian Region Under the Hospital Readmissions Reduction Program and Hospital Value‐Based Purchasing Program |
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