Hospital Value-Based Purchasing: Part 1, Overview of the Program

Hospital value-based purchasing (HVBP) is one of the latest programs that the Centers for Medicare and Medicaid Services (CMS) is using to connect reimbursement to quality in an effort to improve the value of health care provided in the inpatient hospital setting.¹  Although the concept of “value” has a variety of different meanings depending on the situation, within the context of this program, value embodies the idea of attaining better health by providing better care at lower costs.²  Under this program, hospitals are not only paid for the services they provide, but for the quality of these services. The overall goal of the program is to incentivize hospitals to provide high-quality, safe patient care in a cost-efficient manner.³ 

The concept of value-based purchasing is grounded in the economic truism that money changes behavior. Under this program, a percentage of the hospital’s reimbursement is withheld and the hospital...