In response to the DRA mandate, CMS created an internal hospital VBP workgroup with responsibility for developing the VBP plan. To inform the development of the plan, the Assistant Secretary for Planning and Evaluation (ASPE), in collaboration with CMS, contracted with the RAND Corporation in July 2006 to conduct a literature review to synthesize the empirical evidence that exists on P4P in the hospital setting and an environmental scan of the existing P4P landscape.
To take advantage of the experimentation going on nationally with respect to P4P program design and implementation, RAND held discussions with P4P program sponsors, hospitals, hospital associations, data support vendors, and organizations experienced with small and rural hospitals to capture the array of experiences connected with the design and implementation of P4P and P4R programs. The discussions were necessary because this type of descriptive information and this level of detail about program design are not typically contained in peer-reviewed journal articles that summarize the results of P4P interventions. Additionally, many of the demonstration experiments are still in their infancy, and little has been formally documented about the related experiences.
RAND was tasked to:
- Identify and describe the concept of inpatient and outpatient hospital P4P
- Review the existing literature on inpatient and outpatient hospital P4P (theoretical and applied)
- Review existing inpatient and outpatient hospital P4P programs, examining their design features and evaluating the lessons being learned
- Summarize and synthesize the findings from the environmental scan, which would then be used to inform the discussions and design considerations of the CMS VBP workgroup tasked with developing the VBP plan for Congress.
Table 1 highlights core design issues that were examined as part of the environmental scan. Appendix A contains a complete listing of the design issues that were explored.
This chapter builds the foundation for subsequent chapters of this report by defining P4P and its dimensions and by providing the policy context underlying the rationale for P4P as a system reform strategy.