Value Based Purchasing Overview

Healthcare Training Resource
May 16, 2012 — 1,126 views  
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One of the criticisms leveled at the healthcare industry a few years ago was that it was inefficient and bogged down by bureaucracy. One of the motivating factors for the Patient Protection and Accountable Care Act of 2010 was to reduce this institutional sluggishness and encourage hospitals and other healthcare facilities to pursue more efficient and streamlined uses of their resources.

A theory before its implementation, value based purchasing (VBP) is a way for hospitals and other medical service providers to make themselves stand out. It essentially ranks these facilities according to 25 different metrics and standards, including quality management, information availability, patient education and overall healthcare plan performance. When these efforts are undertaken by a medical provider and can demonstrably be used to provide better and cheaper care, CMS reimbursements increase.

The Centers for Medicare and Medicaid Services (CMS) provide health coverage to the elderly as well as the economically disadvantaged. Hospitals cover expenses for these individuals and are later refunded by the federal government through CMS. Facilities that are able to succeed through VBP will find that their reimbursements will improve and their profit margins improve considerably. 

Healthcare Training Resource