Structural racism and the Medicare Hospital Value Based Payment system

Keywords: structural racism, healthcare quality, value-based purchasing, spatial regression
Session Type: Virtual Guided Poster Abstract
Day: Monday
Session Start / End Time: 2/28/2022 05:20 PM (Eastern Time (US & Canada)) - 2/28/2022 06:40 PM (Eastern Time (US & Canada))
Room: Virtual 8

Abstract

Centers for Medicare and Medicaid Services (CMS) provides financial incentives/disincentives for quality of care. For hospitals, 25% of the quality score is based on CMS’s Medicare spending per beneficiary (MSPB): the average cost per Medicare fee-for-service patient for the inpatient stay plus three-days pre-hospitalization and 30-days post-hospitalization. MSPB is adjusted for regional cost-of-living variation, but not for patient mix. We examined the hypothesis that post-hospitalization costs are associated with neighborhood social capital and access to health care.

We used CMS’s Hospital Care Compare 2019 data to obtain the average post-hospitalization proportion of MSPB non-specialty acute care hospitals in the United States. We aggregated these costs by ZIP Code, weighted by the ZIP Code market share of each hospital (left censored at <10 discharges per hospital/ZIP Code combination). Independent variables included race/ethnicity and other sociodemographic factors from the 2015-2019 American Community Survey.

Increased post-hospitalization proportion of MSPB was statistically significantly and strongly associated with proportion non-Hispanic Black and proportion Hispanic, while proportion non-Hispanic White was protective. Increased risk was also independently associated with low educational attainment, high unemployment, and families living in poverty. Indicators of a social safety net – proportion of population receiving food stamps and proportion of adults 18-64 with health insurance – were associated with lower post-hospitalization MSPB proportion. Spatial regression mitigated but did not eliminate the risks. By tying payment to post-hospitalization costs, US policy disproportionately penalizes safety-net hospitals serving neighborhoods which are already experiencing structural racism due to lower access to the social safety net.