When you come home from a hospital stay, the last thing you want to see is the inside of that hospital again. But one in six discharged patients in the U.S. are back in their johnnies in less than 30 days, a third of them in less than seven days, at a national cost of more than $41 billion annually. That’s a hefty burden on patients, taxpayers and employers who pay those bills, and awful for patients.
To address the issue, a payment program by CMS, the agency that runs Medicare, ties three percent of total Medicare reimbursement to hospitals’ readmission rates. The program, called the Hospital Readmission Reduction Program (HRRP), is a little-known part of the Affordable Care Act that saved Medicare more than $2 billion last year according to the Medicare Payment Advisory Commission, a nonpartisan panel that advises Congress. The impact extends beyond Medicare beneficiaries because the incentive is based on readmissions for all patients.
But increasingly, critics are expressing concerns about flaws and unintended consequences.
One unintended consequence was observed in a study in the Journal of the American Medical Association (JAMA) this year, which found that, between 2005 and 2015, implementation of the readmissions reduction incentive coincided with a small but statistically significant increase in deaths within 30 days of discharge among patients hospitalized for heart failure or pneumonia. Meanwhile, researchers and federal officials found coding problems that may have resulted in exaggeration of the impact of the HRRP, and/or caused hospitals to “game” the billing system with no benefit to patients.
Commenters suggest these problems call into question the value of the entire program. But let’s not throw the baby out with the bathwater. Other studies have found promising results without the disturbing uptick in mortality rates, so the jury is still out. And coding problems are always a devilish issue in the Medicare program, by no means unique to the readmissions reduction effort. There are ways to fix them.
This week the influential peer-reviewed Health Services Research explored another often-discussed unintended consequence of the readmissions reduction program: unfair penalties on safety-net hospitals. The study found that hospitals serving disadvantaged neighborhoods were more likely to pay extra for higher readmissions than hospitals serving more affluent populations—a financial hit to hospitals that are already economically vulnerable. The researchers modeled a method developed by National Academies of Science, Engineering, and Medicine, for adjusting the readmissions calculations to account for “social risk factors” such as poverty and housing stability. According to the researchers, the adjustment would reduce readmissions penalties to safety-net hospitals by over 20 percent, which would have amounted to $17 million for these hospitals between 2012 and 2015.
It is undeniable that hospitals in disadvantaged areas must discharge patients into homes and communities with fewer resources to restore health. But there’s a very significant moral hazard to risk adjustment for social factors. With that adjustment, a poor person does not count as much as an affluent person when evaluating hospital performance. Traditional risk adjustment does not bear such a troubling ethical quandary; normal adjustment counts people based on physical health. An 80-year-old diabetic probably won’t have the same outcome as 30-year-old athlete, no matter how good the providers are, so the two patients are not counted the same in evaluating the effectiveness of the clinician or hospital. But adjusting for social factors diminishes expectations for providers based on the poverty of the patient, and that raises red flags.
There are policies that could address the special circumstances of safety-net hospitals without condemning their patients to a lesser status in the measurement. For instance, instead of adjusting numbers based on the profile of individual patients, Medicare could adjust for the profile of individual hospitals. Safety-net hospitals could be held to a different standard for readmissions numbers, without changing how we count the numbers of readmissions.
Despite the issues and challenges emerging about the readmissions reduction program, the most promising signs that that the program works come from hospitals and clinicians themselves. We are seeing leadership and innovation on a grand scale as hospitals reinvent their missions to extend beyond the four walls of the hospital itself. For instance, Saint Francis Memorial Hospital in San Francisco lowered its readmission rates with easy-to-comprehend scorecards that help patients understand their post-hospital treatment. Boston University Medical Center’s Project RED (Re-Engineered Discharge) arranges follow-up appointments between patients and nurse advocates who visit the patients at home, reducing readmissions by 30 percent. The Wisconsin Hospital Association’s Partners for Patients initiative brought hospitals together for a statewide campaign leading to reduction of 3,500 readmissions and savings of more than $34 million. Programs like these are increasingly ubiquitous, and they make a real difference in people’s lives.
Still, much more needs to be done. There is a need for ongoing vigilance, flexibility and refinements of the readmissions reduction program. But we should never let the inevitable need for refinements send us backward to the nonsensical policies of the old days, just a decade ago, when Medicare paid the hospitals more when readmissions occurred. This is a policy that works, as long as we make it better together.
Date: April 03, 2019