How talent management affects VBP performance: 5 findings

Hospitals that have implemented talent management and succession planning best practices score higher on metrics in CMS' Value-Based Purchasing program, which are tied to reimbursement rates for Medicare and Medicaid.

The finding comes out of Malibu, Calif.-based Pepperdine University Graziadio School of Business and Management's Healthcare Talent Management Survey. Kevin S. Groves, PhD, study author, said that under the Patient Protection and Affordable Care Act, hospitals are concentrating on the patients' experiences rather than the number of patients served.

The study results were measured by the degree to which each system utilized Success Factors, which are made up of eight sets of talent management and succession planning practices derived from prior research of exemplary hospital organizations.

Here are five key findings from the study.

1. Hospitals and health systems with high Success Factors reported a mean Medicare spending per beneficiary of $17,493, compared to $20,706 for organizations with less-developed talent management and succession planning practices. Because CMS weighted Medicare spending per beneficiary as 20 percent of a hospital's overall VBP score, this decrease in spending leads to higher hospital reimbursement rates for FY 2015.

2. Hospitals and health systems with strong talent management and succession planning practices are correlated with 11 percent higher patient satisfaction. Patient satisfaction is the largest factor for a hospital's reimbursement rates under the VBP program in FY 2015.

3. Hospitals and health systems with high Success Factors demonstrated lower annual turnover for executives, managers and nurses compared to systems with low Success Factors scores. The study found a turnover rate of 3.33 percent for executives (compared to 19.95 percent); 5 percent for managers (compared to 15.21 percent); and 8.74 percent for nurses (compared to 13.61 percent).

4. Hospitals and health systems with high Success Factors scores were more likely to source executive talent internally. High-scoring hospitals had 68 percent of open executive positions filled by internal candidates compared to 21 percent for systems with low Success Factors scores. High-performing hospitals were also more likely to report they had "at least one 'ready now' candidate for key leadership roles" (52 percent versus 7 percent).

5. High-scoring hospitals and health systems reported greater percentages of women and ethnic minorities across all executive positions. Systems with high Success Factors scores had 54 percent of women and 32 percent of ethnic minorities across these positions, while low-performing systems had 43 percent of women and 17 percent of minorities.

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