Value-Based Purchasing Requires Behavior-Based Hiring

Once the Centers for Medicare and Medicaid Services implements value-based purchasing in 2013, eligible hospitals will be rewarded by the agency based on their performance against specific standards. While it has always been reasonable to assume that the quality of a hospital's staff has a bearing on its financial performance, value-based purchasing will make the link very direct, obvious and measurable. Hospitals that will be held to the value-based purchasing rule within the Affordable Care Act should begin now to ensure that their new hires have the skills and predisposition to conform to the treatment standards that support high-quality health outcomes.  

What is value-based purchasing?

The concept of value-based purchasing is a derivative of pay-for-performance, a practice that aims to reimburse a service provider not on a straight fee for a given service (what could be considered effort- or volume-based purchasing), but rather on the quality of the service rendered as measured by the outcome.

In recent years, CMS has been striving to shift Medicaid from a "passive payer of claims to an active purchaser of quality care for its beneficiaries." [1] Provision section 1886 (o) of the ACA, which requires the Secretary of Health and Human Services to establish a value-based purchasing program to pay hospitals for their actual performance on quality measures, rather than just the reporting of those measures, is a major step in support of CMS' goal.  In speaking of value-based purchasing, CMS Administrator Donald Berwick, MD, said: "Under this new initiative, we will reward hospitals for delivering high-quality care, treating their patients with respect and compassion, and ensuring they have the opportunity to participate in decisions about their treatment." [2]

Value-based purchasing will have an impact on hospitals' reimbursement rates, incentive payments and business volume, and it has been estimated that the average hospital will have $6.67 million in revenue at risk over the first five years of the new scheme. [3] Already, employers are discounting employees' benefit plan contributions when they select the highest performing healthcare providers and hospitals. This will most certainly drive patient choice.

VBP program measures
The VBP program will apply to acute-care hospitals that take part in the Social Security Act's Prospective Payment System and will pertain to discharges occurring on or after October 1, 2012.  As of this writing, payment will be based on a combination of two types of performance measures: 70-percent on clinical process of care metrics, and 30-percent on the results of the Hospital Consumer Assessment of Healthcare Providers and Systems survey, a nationally-standardized survey of discharged patients.  

The current proposal includes 18 clinical processes-of-care measures covering heart attack care, heart failure care, pneumonia care, and surgical care — all among the most costly types of hospitalizations.  

The HCAHPS survey is administered by participating hospitals to a random sample of discharged patients and includes 27 questions across eight basic themes: nurse communication, doctor communication, cleanliness of the environment, quietness of the environment, responsiveness of staff, pain management, communication about medications and the provision of discharge information.  All are topics important to consumers, and all are easier for patients to judge than clinical quality.  HCAHPS results are published quarterly at, and hospitals must submit their survey results in order to receive full Medicare payment under the inpatient prospective payment system.

Using these measures, hospitals will be evaluated by CMS on their overall achievement as compared to a national benchmark comprised of data on the "universe" of hospitals during the same performance period.  The scoring methodology will also take into consideration a hospital's improvement over its performance in a prior measurement period.  

Hiring with an eye to VBP

Hospitals will naturally need to embark on rigorous internal programs to prepare themselves for VBP, articulating quality goals, developing new processes and procedures and training staff. Part of that preparation should, of course, be to screen job candidates for their demonstrated ability to conform to the standards that will be measured with VBP.  After all, it is much more efficient to hire people who possess a given set of skills than it is to attempt to develop those skills in people after they are hired.  And, arguably, an employer has little hope of instilling employees with a particular set of values; employees tend to come with their own established values which are hard — if not impossible — for an employer to influence.  

Given that the short interview process will most likely not uncover every one of the performance measures that relate to VBP, hospitals must find a better way to screen for candidates who will support their quality goals. Thanks to Web 2.0 technology, there is an efficient and uniform way:  gathering feedback via an online survey from the managers, peers and subordinates who have had an opportunity to observe the candidate in action. Through this process, references can report in candid detail on an applicant's skills and behaviors that lead to success in a given job and that further the hospital's quality and VBP objectives. 

Sample screening questions
The best designed assessment surveys for hospital workers include questions that cover three basic types of skills and behaviors:

•   Core attributes: Hard-to-measure attributes that all employees should possess, such as the tendency to show respect toward others or the ability to communicate effectively;
•    Job-level skills and behaviors: Factors that are linked to operating as an individual contributor or to managing others; and
•   Job-function skills and behaviors: Practices related to specific job responsibilities, such as monitoring patient status or advocating for corrective action when appropriate.

A survey of this type is not designed to test for the specific clinical care practices on which VBP will be based, such as "Prophylactic antibiotics discontinued within 24 hours after surgery."  However, it is designed to evaluate candidates on their general conformance to quality standards and on their demonstration of specific behaviors that also matter to HCAHPS.  See Figure 1 for sample recommendation questions that screen for VBP-supportive behaviors.

Figure 1: Evaluating a Nurse, Physician, Patient Care Tech or Aide Candidate

VBP Measures

Reference Assessment Question


During this hospital stay, how often did nurses explain things in a way that you could understand?

For nurse: Compared to others in the workplace, to what extent does the candidate communicate necessary and important information to physicians, supervisors, patients, and co-workers?

How satisfied are patients with their experience of care at the hospital?   

For physician: Does the candidate display compassion in response to patient's needs and concerns?

During this hospital stay, how often were your room and bathroom kept clean?    

For patient care tech: Does the candidate pay close attention to details with tasks (e.g., recording information; cleaning)?
Clinical Processes of Care

Discharge instructions provided?

For nurse: Does the candidate effectively instruct patients and their families on home care procedures?

For physician: Does the candidate provide clear instructions to patients on how to correctly take medications?

Heart attack patient given fibrinolytic medication within 30 minutes of arrival? 

Pneumonia patients given blood culture in ER, prior to administration of first hospital dose of antibiotics?

Prophylactic antibiotic administered within one hour prior to surgical incision?
To what extent does the candidate follow established clinical guidelines, seeking to achieve the highest quality outcomes?

In the foreseeable future, leading hospitals will have their sites set on targets not only for complying with accreditation requirements, but also with VBP performance measures. Proactive hospitals will not wait to learn what skills and behaviors need to be addressed with their staff, but will proactively see that their practices conform to the standards required for accreditation and financial incentives. By combining the latest technology with carefully-constructed survey questions that are executed through online reference-checking, hospital employers can be even more proactive by hiring employees who have already demonstrated an ability and willingness to contribute to the new standards.  

Darica Ward (Vice President, Product Management and Marketing) is responsible for setting the direction of SkillSurvey’s marketing, brand recognition and product management strategies. Ms. Ward has been a human capital management leader and software entrepreneur for more than 13 years, establishing specific expertise in the health care vertical.  Prior to joining Skillsurvey, she was the co-founder of Competency Assessment Solutions, a leading provider of performance management software for hospitals. Her success at CAS was punctuated by its successful acquisition by Lawson Software in 2006. Prior to CAS, Ms. Ward had human resource leadership roles at Inova Health System and Verizon Communications, including compensation, HR strategy and HR operations. She started her career at Mercer Consulting in their Performance and Rewards Practice after receiving her MBA from The American University. She can be reached at

[1] Federal Register, Vol. 76, No. 88, Friday, May 6, 2011/Rules and Regulations.
[2] “Administration Implements Affordable Care Act Provision to Improve Care, Lower Costs,” U.S. Department of Health and Human Services press release, April 29, 2011.  
[3] Davis, Caralyn, “Medicare Value Based Purchasing: 75 Percent of Hospitals Face Losses,” Fierce Health Finance, June 30, 2010.

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