Introduction

Consumers have been able to compare their local hospitals online, at Hospital Compare, since 2008. Data on patient satisfaction, collected via the national Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey, has been included in Hospital Compare since 2008—but did not affect hospital funding until fiscal year (FY) 2013. That’s when Medicare began rewarding hospitals that met certain quality measures—and penalizing those that fell short—as part of its valuebased purchasing program.

Here’s how it works:

2%

Medicare withholds a small percentage of the regular fees it pays to participating hospitals. For FY 2016, Medicare is withholding 1.75 percent. Starting in FY 2017, the withholding will increase to 2 percent.

Hospitals are assigned an overall rating—and up to five stars—based on how well they meet quality measures for safety, clinical processes, efficiency, and patient experience and satisfaction.

The overall rating determines how much of the withheld funds will be returned to each hospital. Lower-rated hospitals will lose money. Strong performers and those who receive high marks for improvement will be rewarded with a larger share.

25 percent Patient experience and satisfaction accounts for 25 percent of that overall rating.

MORE THAN HALF

The bottom line:

If patients are dissatisfied, hospitals will literally pay the price in reduced Medicare payments. No wonder more than half (54 percent) of healthcare leaders surveyed in 2013 cited patient experience and satisfaction as one of their organization’s top three priorities for the next three years. 1