Financial Performance of Hospitals in the Mississippi Delta Region Under the Hospital Readmissions Reduction Program and Hospital Value-based Purchasing Program

Abstract

Background: 

Previous studies showed that the Hospital Readmissions Reduction Program (HRRP) and the Hospital Value-based Purchasing Program (HVBP) disproportionately penalized hospitals caring for the poor. The Mississippi Delta Region (Delta Region) is among the most socioeconomically disadvantaged areas in the United States. The financial performance of hospitals in the Delta Region under both HRRP and HVBP remains unclear.

Objective: 

To compare the differences in financial performance under both HRRP and HVBP between hospitals in the Delta Region (Delta hospitals) and others in the nation (non-Delta hospitals).

Research Design: 

We used a 7-year panel dataset and applied difference-in-difference models to examine operating and total margin between Delta and non-Delta hospitals in 3 time periods: preperiod (2008–2010); postperiod 1 (2011–2012); and postperiod 2 (2013–2014).

Results: 

The Delta hospitals had a 0.89% and 4.24% reduction in operating margin in postperiods 1 and 2, respectively, whereas the non-Delta hospitals had 1.13% and 1% increases in operating margin in postperiods 1 and 2, respectively. The disparity in total margins also widened as Delta hospitals had a 1.98% increase in postperiod 1, but a 0.30% reduction in postperiod 2, whereas non-Delta hospitals had 1.27% and 2.28% increases in postperiods 1 and 2, respectively.

Conclusions: 

The gap in financial performance between Delta and non-Delta hospitals widened following the implementation of HRRP and HVBP. Policy makers should modify these 2 programs to ensure that resources are not moved from the communities that need them most.