Hospital Reimbursement: A Powerful Tool for Medicare Patient Health

Abstract

Though most Medicare processes are based on a fee-for-service model - value based reimbursement has recently gained popularity. Value based reimbursement systems reward hospitals for the quality of their service, improvement, readmission rates, and other factors. Though these seem to be well-intentioned policies of reimbursement, more needs to be done to understand potential implications for patients. With the passing of the Affordable Care Act, the Hospital Value Based Purchasing Program began in 2011. Here we study the current state of hospitals participating in the program and how their experience differs based on adjustment rate, wage, and case index. We will use the information collected from our analysis of the current state to determine the optimal rates of adjustment and reimbursement to support broader hospital development. With a proposed queuing model we simulate and project results for hospitals after implementing new adjustment rates.