Annals of Health Law
VALUE BASED PURCHASING
thirty-seventh, 50 a showing that the New York Times referred to as
“dismal.” 51 More recently, the Commonwealth Fund compared the United
States with other advanced nations through surveys of patients and doctors
and analysis of other data. Its latest report, issued in May of 2007, “ranked
the United States last or next-to-last compared with five other developed
nations on the majority of performance measures, including quality of, and
access to, care.” 52 In that same report, the Commonwealth Fund ranked the
United States first in providing the “right care” for a given condition as
defined by standard clinical guidelines. The United States scored highly for
preventive care services, such as pap smears and mammograms, as well as
blood tests and cholesterol checks. But the United States scored poorly “in
coordinating the care of chronically ill patients, in protecting the safety of
patients, and in meeting their needs and preferences.” All of these poor
showings drove the overall quality rating down to last place for the country.
According to a New York Times article covering the Commonwealth
Fund report, “American doctors and hospitals kill patients through surgical
and medical mistakes more often than their counterparts in other
industrialized nations.” 53 Estimates indicate that nearly 100,000 patients die
each year in the United States from preventable medical errors. 54 At the
same time, patient safety measures have worsened by nearly one percent
each year for the past decade. 55 Health care associated infections
significantly drive up the cost of health care by nearly $28 to $33 billion per
As state and federal governments, payers, and consumers recognize both
the enormity of quality concerns and financial pressures, and the connection
between the former and the latter, the public and private sectors have
responded in various ways in an attempt to reduce costs and improve
quality. The two programs analyzed in the next section, Medicare Hospital
Value Based Purchasing Program, and the Bundled Payments for Care
Improvement Initiative, each take varying approaches to accomplish the
same goals: reducing cost and improving quality.
51. Editorial, World’s Best Medical Care? N. Y. TIMES, Aug. 12, 2007, at WK9,
available at http://www.nytimes.com/2007/08/12/opinion/12sun1.html?pagewanted=all.
54. K.T. KOHN, ET AL., TO ERR IS HUMAN: BUILDING A SAFER HEALTH SYSTEM, INST. OF
MEDICINE 26 (Nat’l Acad. Press, 1999).
55. AGENCY FORHEALTHCARERESEARCH ANDQUALITY,NATIONALHEALTHCARE
QUALITY REPORT, 2008 (2008) 14, available at http://www.ahrq.gov/qual/nhqr08/nhqr08.pdf.