By Dr. Kathleen Ziegler, RN, DHA, MSHA, FACHE

Achieving successful healthcare organizational transformation that delivers value-based outcome performance meaningful to all stakeholders is a critical objective for healthcare executives. Transforming their organization  from a fee-for-service model to a value-based model that demonstrates excellence in patient-centered clinical outcomes, is rapidly growing in importance and priority—both from a regulatory and financial perspective. One strategy on the short list of must-do is to prioritize and focus on the area of patient experience of care delivery.

Patient experience has grown in importance since the passage of the Patient Protection and Affordable Care Act (2010) (ACA).1 One component of the ACA that focuses on patients’ experiences of care is contained within Value-Based Purchasing programs. Value-Based Purchasing (VBP) programs are Centers for Medicare & Medicaid Services (CMS) initiatives that reward healthcare providers to deliver quality care outcomes to Medicare beneficiaries that exceed national outcome standards with financial incentives tied to base operating payments, and penalize those that do not achieve these outcomes. The VBP programs are part of a larger Health and Human Services Strategy to achieve better care for individuals, better health for populations, at a lower cost.2 Although the initial VBP program started in the inpatient setting affecting approximately 3,500 hospitals consuming and the largest portion of Medicare spending, it continues to evolve, grow, permeate, and impact several other healthcare settings such as outpatient primary and specialty care clinics, skilled nursing facilities, and home health care.

Over the last several years, evaluation of patients’ experiences of care have been standardized through the family of Consumer Assessment of Healthcare Providers & Systems (CAHPS) surveys.3 The various CAHPS surveys assess critical aspects of care delivery such as nursing, physician, and medication communication; responsiveness and coordination to care needs; among others deemed most important to patients related to their perceptions care delivery.

Hospital organizational performance on HCAHPS surveys is an important financial outcome measure. Hospitals have financial risk represented in financial gains or losses that account for 1.75 percent 2016 fiscal year hospitals’ base operating diagnosis-related group (DRG) payments. This will be increased to 2.0 percent for fiscal year 2017. This can be a significant amount of financial loss if achieving poor patient experience scores for healthcare organizations. However, healthcare organizations participating in VBP programs have much to gain from delivering exceptional patient experience.

This is where an important distinction arises as patient satisfaction is often confused with patient experience. Patient experience surveys focus on “how patients experienced or perceived key aspects of their care, not how satisfied they were with their care.”4 Health leaders are now demonstrating increased interest to improve key aspects of patients’ experiences of care and understanding overall patients’ satisfaction with their care.

Since the passage of the ACA over six years ago, the linkage of financial reimbursements to VBP programs, also called pay-for-performance, have provided clear and compelling motivation to healthcare leaders to focus and prioritize their efforts to improve the quality, the safety, and the value of care delivered to improve patient experience and satisfaction. Increasing evidence has been generated to support the importance of this strategic focus on the patient experience movement and its financial impact on organizations’ bottom line.

Spending the additional time and effort to improve the patient experience pays off!

According to a recent study conducted by Accenture5 in 2015 that explored the relationship between hospital financial performance (using CMS reported hospital income margin data) and patient experience of care scores (using CMS HCAHPS surveys) the results were compelling. Researchers reported that a correlation existed between the patient experience of care and higher financial margins.6 In addition, this correlation exists nation-wide and among all types of hospitals (geography – urban and rural; ownership – profit and non-profit; academic – academic — non-academic; and health system affiliation — part of a health system or independent).7 The researchers suggested that urban hospitals that deliver exceptional patient experience may increase their margin eight-fold over that of rural hospitals and margins of top-performing hospitals (those obtaining HCAHPS survey rating of 9 or 10) grew faster than non-top-performing hospitals8.

These results were further supported in a study conducted by Betts and colleagues (2016) demonstrating a large association between patients’ experiences of care and financial performance.9 Richter and Muhlestein (2016) suggest similar findings that favorable patient experiences are associated with increased profitability, but more importantly, found that negative patient experiences are more strongly associated with reduced profitability.10 The positive benefits of achieving excellent patient experience ratings do not stop at financial profitability, they also impact the fundamental goal of providing the best clinical outcomes.

Patient experience is also associated with better clinical outcomes and reduced readmissions!

Recent studies focusing on the importance of patient experience have not only demonstrated favorable financial impact on organizational margins, but also have shown a strong association with exceptional patient experience and the reduction of complications and readmissions.

In a study by Trzeciak and colleagues (2016), the researchers explored the association of the newly released CMS patient experience Summary HCAHPS Star Ratings and clinical outcomes by analyzing over 3000 risk-adjusted US hospitals.11 The CMS HCAHPS Star Ratings were established to enable consumers to quickly and easily assess information surrounding the patient experience of care published on the Hospital Compare Web site.12 The results from this study demonstrated that obtaining a higher number of stars on the Summary HCAHPS Star Rating had a statistically significant association with reduced rates of clinical outcome measures that include:

  • joint replacement complications
  • postsurgical deep venous thrombosis
  • central line-associated bloodstream infection
  • composite measure for all serious complications.13

A statistically significant association was also found between higher Summary HCAHPS Star Ratings and lower rates of readmission within these areas:

  • congestive heart failure acute
  • myocardial infarction
  • stroke
  • chronic obstructive pulmonary disease (COPD)
  • pneumonia
  • joint replacement
  • composite measure for readmission among all patients.13

In summary, achieving successful healthcare organizational transformation that delivers value-based outcome performance meaningful to all stakeholders in the form of patient-centered care is no longer a nicety, it is a critical component in every healthcare leaders’ toolbox arsenal. Focused strategies and initiatives to drive patient-centered care can substantially contribute to enhancing financial rewards and avoidance of penalties in the form of VBP incentives, reducing patient harm in the form of hospital acquired conditions and inefficiencies in care delivery, and avoid diverting precious resources and care expenditures to address avoidable patient safety complications. Healthcare leaders that prioritize the importance of efforts related to enhancing patients’ experiences of care and quality of care, can reap the rewards of increased margins over peers, enhanced financial growth to improve care delivery and services, and increased engagement from patients and staff.

What are you waiting for? The time is now to focus on positively impacting the patient experience!


References

  1. Patient Protection and Affordable Care Act, 42 U.S.C. § 18001 (2010).
  2. S. Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS). (2015). What are the value-based programs? Retrieved from https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Value-Based-Programs.html
  3. S. Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS). (2016). Consumer Assessment of Healthcare Providers & Systems (CAHPS). Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/CAHPS/
  4. U.S. Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS). (2016). Consumer Assessment of Healthcare Providers & Systems (CAHPS). Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/CAHPS/
  5. Collier, M. & Meyer Basham, L. (2015). Patient engagement: Happy patients, healthy margins. Accenture website [Insight Driven Health]. Retrieved from https://www.accenture.com/t20151003T033201__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Industries_17/Accenture-Happy-Patients-Healthy-Margins.pdf#zoom=50
  6. Ibid
  7. Betts, D., Balan-Cohen, A., Shukla, M., & Kumar, N. (2016). The value of patient experience: Hospitals with better patient-reported experience perform better financially. Washington, DC: Deloitte Center for Health Solutions.
  8. Richter, J. P., & Muhlestein, D. B. (2016, in press). Patient experience and hospital profitability: Is there a link? Health Care Management Review. DOI: 10.1097/HMR.0000000000000105
  9. Ibid.
  10. Trzeciak, S., Gaughan, J. P., Bosire, J., & Mazzarelli, A. J. (2016). Association between Medicare Summary Star Ratings for patient experience and clinical outcomes in US hospitals. Journal of Patient Experience, 3(1). Doi: 10.1177/2374373516636681
  11.  HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems (2016). HCAHPS Star Rating. Retrieved from http://www.hcahpsonline.org/StarRatings.aspx
  12. Trzeciak, S., Gaughan, J. P., Bosire, J., & Mazzarelli, A. J. (2016). Association between Medicare Summary Star Ratings for patient experience and clinical outcomes in US hospitals. Journal of Patient Experience, 3(1). Doi: 10.1177/2374373516636681
  13. Ibid.