Safety-net hospitals losing money under Medicare quality-based payments program

Safety-net hospitals—those that typically treat the poorest patients—are losing money under a Medicare program that bases reimbursements on hospital quality. In a new analysis, Ashish Jha of Harvard School of Public Health (HSPH) found that hospitals that treat the most low-income patients had their payment rates reduced by 0.09% according to the latest data from Medicare’s so-called “value-based purchasing” program, whereas hospitals with the fewest low-income patients received an average bonus of 0.60%.

Under the new federal health care law, Medicare is basing its bonuses and penalties on 24 quality measurements, including mortality rates and how patients rate hospitals.

Jha, professor of health policy and management at HSPH, said in his blog, “An Ounce of Evidence,” that it’s not clear why safety-net hospitals are losing money under the quality-based Medicare program. But, he added, “My suspicion is that much of the difference is driven by differences in patient experience scores. The challenge for all of us is to understand why safety-net hospitals generally have worse patient experience scores. Is it that poorer or minority patients are just less likely to give high scores on patient experience? Or are safety-net hospitals not doing as good of a job on patient-centered care? Until we know, we must be careful declaring that this is an unfair playing field.”

Read a Washington Post article about Jha’s findings

Read Jha’s blog, “An Ounce of Evidence”