The Medicare program's emphasis on care coordination takes a new turn next year when its hospital value-based purchasing program adds a new measure — Medicare spending per beneficiary, or MSPB — to the formula that determines how much each hospital is paid.

The measure is noteworthy because, for the first time, it holds hospitals accountable for the costs of some outpatient and post-acute care, even if the providers are not affiliated with the hospital.

"This can help us measure how well we are coordinating care," says Susan Dragoo, director of quality and innovation at Integris Health, a 15-hospital system in Oklahoma.

Baseline measures, reported as efficiency scores, already are posted on Medicare's Hospital Compare website. A score of 1 indicates the hospital performs at the average efficiency of all hospitals nationally; a score higher than 1 indicates the hospital is more costly than average and a score below 1 shows greater efficiency than the average.

Those simple efficiency scores are calculated using hundreds of data points in MSPB reports available on The reports detail each hospital's spending for three phases of care — the three days before admission, the inpatient stay and the 30-day period after discharge — for each major diagnostic category, such as circulatory system or digestive system.

The reports compare a hospital's spending levels in each category with state and national averages. Further, the reports reveal the spending in each phase by type of claim — outpatient, inpatient, skilled nursing, durable medical equipment and others.

Thus, the reports allow hospitals to see how their various service lines stack up to their peers in efficiency, and highlight areas that might be dragging down the hospital's overall performance. "It definitely gives you the place to start working," Dragoo says.

Nancy Foster, the American Hospital Association's vice president of quality and patient safety policy, says the reports may be most useful in helping hospitals to understand the costs of post-acute care for the patients they discharge. The Institute of Medicine earlier this year reported that differences in skilled nursing homes and home health care are responsible for much of the variation in health spending for Medicare beneficiaries. That suggests that reducing post-acute care costs may be the best opportunity for some hospitals to improve their efficiency scores.

"My conclusion is that the work hospitals have initiated to reach out to others in their community who care for patients post-discharge, and to ensure better transitions of care, better continued communication and better help for the patient to stay on the path toward wellness is going to be absolutely essential in helping to reduce that variation in cost," Foster says.