Engineering Value in Healthcare: Applying Failure Modes and | 46810

Health Economics & Outcome Research: Open Access

ISSN - 2471-268X


Engineering Value in Healthcare: Applying Failure Modes and Effects Analysis to Value Based Purchasing

Amy Cress, Lee Revere*, Osama Mikhail, Lisa Pompeii and Debora Simmons

The Centers for Medicare and Medicaid Services (CMS) introduced the hospital Value Based Purchasing (VBP) program in 2012, providing a definition and structure for measuring value in hospital-based healthcare services. Under this new program, CMS withholds a percentage of reimbursement from each participating hospital. CMS then distributes withholds back to hospitals based on VBP total performance scores (TPS), which are weighted calculations that include scores on multiple measures such as clinical process of care and patient satisfaction. Currently, hospitals have no easily applied method for prioritizing which measures of VBP to improve in order to maximize the hospital’s reimbursement of withhold. This research develops and pilots an objective method, Value Failure Modes and Effects Analysis (VFMEA), for hospitals to target VBP measures for improvement by analyzing current performance and optimizing limited resources. VFMEA provides hospital administrators needed insight to reliably prioritize VBP measures for improvement and to direct resources toward improvement that will produce the largest gain in the hospital’s TPS, and thus reimbursement of withhold.