Hospital value-based purchasing, market competition, and outpatient imaging efficiency

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Background: The Centers for Medicare & Medicaid Services (CMS) collects data on hospital outpatient imaging efficiency (OIE) to reduce unnecessary exposure to contrast materials and prevent wasteful use of Medicare resources. In 2013, CMS implemented the Inpatient Hospital Value-Based Purchasing Program to improve quality and efficiency. There has been no systematic study that examines the association between hospital inpatient hospital value-based purchasing (HVBP) total performance, market competition, and OIE. This study fills the gap in the literature. Methods: Using a longitudinal study design, data from the 2015–2018 American Hospital Association Annual Survey, the Medicare Hospital Compare, and the Area Health Resources Files (AHRF) database were utilized. Statistical analyses were conducted using fixed effects multivariate linear panel regression model for all hospitals (n=4,093). The main outcome variables for this study were the six OIE variables measuring the efficient use of medical imaging tests, including magnetic resonance imaging (MRI) lumbar spine for low back pain, mammography follow-up rates, thorax computerized tomography use of contrast material, abdomen computerized tomography use of contrast material, cardiac imaging for preoperative risk assessment for non-cardiac low-risk surgery, and simultaneous use of brain computerized tomography and sinus computerized tomography. The main predictor variables were hospital inpatient total performance score (TPS) and hospital market concentration, defined by Herfindahl-Hirschman index (HHI). Results: The multivariate panel data analysis indicated that hospitals with low TPSs also had a significantly lower rate of imaging services utilization for abdomen computerized tomography use of contrast material [coefficient (b) =–0.58; standard error (SE) =–0.22], indicating higher efficiency. also, hospitals in more competitive markets had a significantly higher rate of thorax computerized tomography use of contrast material (b=0.59; SE =–0.28), indicating lower efficiency of these services. Conclusions: The findings from this study provide significant policy and practice implications. On the one hand, hospitals located in more competitive markets should consider strategies to improve their total performance to be better reimbursed by Medicare instead of offering more expensive outpatient imaging services. On the other hand, policymakers should monitor high performing hospitals since these hospitals also tend to provide more unnecessary outpatient imaging tests.

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doi: 10.21037/jhmhp-20-127