ArticleValue-Based Purchasing, Efficiency, and Hospital PerformanceZhao, Mei PhD; Haley, D. Rob PhD, MBA, MHS; Spaulding, Aaron PhD, MHA; Balogh, Holly A. MHA Author Information Author Affiliations: University of North Florida (Drs Zhao, Haley, and Spaulding); and Nemours Children’s Clinic Jacksonville, Florida. The authors have no funding or conflict of interest. Correspondence: Mei Zhao, PhD, University of North Florida, FL ([email protected]). The Health Care Manager: January/March 2015 - Volume 34 - Issue 1 - p 4-13 doi: 10.1097/HCM.0000000000000048 Buy Metrics Abstract The Medicare hospital value-based purchasing (HVBP) program that links Medicare payments to quality of care became effective in 2013 in the United States. Hospital efficiency will be added to the HVBP in 2015. It is unclear whether hospital efficiency–specific hospital characteristics are associated with HVBP performance scores and the subsequent incentive payments. Using data from the American Hospital Association Annual Survey the Medicare Hospital Compare, this article examines the association of hospital efficiency hospital characteristics with the HVBP performance scores. The results indicate that less efficient hospitals are more likely to have lower patient satisfaction scores and total performance scores compared with more efficient hospitals. Hospital size, ownership, and payer mix also have significant impact on HVBP performance scores. The findings of this study provide significant policy practice implications. On the one hand, hospitals should consider investing their limited resources into identifying implementing the most cost-effective procedures to improve their patient experience total performance scores. On the other hand, policymakers should consider the unintended negative impact that these new payment incentives will likely have on hospitals that serve a higher proportion of low-income racial ethnic minority populations. Copyright © 2015 Wolters Kluwer Health, Inc. All rights reserved.