Key to the implementation of a PSH model is a strong pain medicine program, with an emphasis on providing high value acute pain management while patients are in the hospital and coordination with primary care providers and chronic pain medicine specialists during preoperative preparation and postoperative rehabilitation and recovery. At the VA Palo Alto, our anesthesiologists and pain medicine specialists have successfully initiated new coordinated pain medicine programs within the PSH model, including a multidisciplinary spine pain clinic, a women’s health and pain management clinic, and a multi-specialty orthopedic joint arthroplasty program.

CPA: How have you been impacted by the Affordable Care Act?

ERA: For many reasons, the federal government is working to curb health care expenditures, but many of the processes currently attributed to the Affordable Care Act have been in the works for a long time. As an example, the Medicare Modernization Act of 2003 introduced the Inpatient Prospective Payment System; this system encouraged participating hospitals to voluntarily report performance data to avoid payment reductions. The Deficit Reduction Act of 2005 went further by mandating the development of what we now know as pay-for-performance or value-based purchasing (used interchangeably).Value-based purchasing in health care is supposed to reward better value, patient outcomes, and innovations – instead of just volume of services. It is funded by participating institutions based on withholding a set percentage (1.25% currently) of their estimated annual Diagnosis-Related Group (DRG) payments from Center for Medicare and Medicaid Services (CMS). The percentage is increasing every year and will be 2% by 2017.

For FY2014, the elements of value-based purchasing have been updated to include the Clinical Process of Care Domain, Patient Experience of Care Domain, and a new Outcomes Domain. The amount that each of these domains contributes to the eventual DRG payment return at the end of the year is 45%, 30%, and 25%, respectively. Scores in each domain are calculated based on an institution’s improvement compared to its own historical performance and a comparison against national benchmarks.