Association Between Medicare's Mandatory Hospital Value-Based Purchasing Program and Cost Inefficiency.

BACKGROUND: The Patient Protection and Affordable Care Act instituted pay-for-performance programs, including Hospital Value-Based Purchasing (HVBP), designed to encourage hospital quality and efficiency. OBJECTIVE AND METHOD: While these programs have been evaluated with respect to their implications for care quality and financial viability, this is the first study to assess the relationship between hospitals' cost inefficiency and their participation in the programs. We estimate a translog specification of a stochastic cost frontier with controls for participation in the HVBP program and clinical and outcome quality for California hospitals for 2012-2015. RESULTS: The program-participation indicators' parameters imply that participants were more cost inefficient than their peers. Further, the estimated coefficients for summary process of care quality indexes for three health conditions (acute myocardial infarction, pneumonia, and heart failure) suggest that higher quality scores are associated with increased operating costs. CONCLUSION: The estimated coefficients for the outcome quality variables suggest that future determination of HVBP payment adjustments, which will depend solely on mortality rates as measures of clinical care quality, may not only be aligned with increasing healthcare quality but also reducing healthcare costs.

How to reduce the risk of purchasing fraud.

Purchasing fraud leads to significant losses for healthcare entities and damages the reputation of the industry. Designing and implementing an effective internal control environment helps reduce the risk of fraud. An effective control environment includes a variety of policies, procedures, strategies, and tactics.

State systems Advance Planning Document (APD) process. Final rule.

The Advance Planning Document (APD) process governs the procedure by which States obtain approval for Federal financial participation in the cost of acquiring automated data processing equipment and services. This final rule reduces the submission requirements for lower-risk information technology (IT) projects and procurements and increases oversight over higher-risk IT projects and procurements by making technical changes, conforming changes and substantive revisions in the documentation required to be submitted by States, counties, and territories for approval of their Information Technology plans and acquisition documents.

The Italian market: procurement update.

The procurement process in Italy is becoming more complex and expensive. In a complete overhaul of the system, there are new product classifications and new procedures to adopt.

Legal. Sharing the risk.

Negotiating IT contracts isn't for the faint of heart. Increasingly, hospitals are demanding that vendors share some of the financial and legal risk in case of product failure or an error.