Medicare Penalties To Kick In Soon for Hospitals With Excess Readmissions - A Good Thing?

 In most businesses, there's some implied warranty that goes into effect immediately after the purchase is transacted. You buy a car and it develops engine trouble after two weeks, you're very likely to see the dealer step up, provide the repairs at virtually no financial cost to you. They are trying to build a relationship as much as anything and prompt response to a customer's problem is an effective way to achieve that. If you've bought an extended warranty, you're protected for an even longer time.

Let's look at a completely different type of business, food service. There are no additional warranties available for purchase at any restaurant I know of, so the addressing of an unhappy customer happens on the spot. Items are replaced and in some cases, that's all there is to it. In other more troublesome cases, the business will reduce the size of the bill and/or offer some incentive for the customer to return once more.

Looking at healthcare, there has never been this type customer satisfaction device utilized on a widespread basis. Nor could there be a program that looks very much like anything we'd recognize as a warranty/customer satisfaction offering. Health care, by its nature, its unique and different. Things aren't always discovered or known to be wrong until a much later time measured in weeks not days, plus the dire nature of a medical problem is held in a much higher priority than that of an over-cooked steak.

Starting in October of this year, hospitals experiencing a higher than expected readmission rate, (based on 30 day readmits) will be penalized by Medicare. According to Kaiser Health News, as many as 2,000 hospitals will forfeit about 280 million in Medicare reimbursements due to this issue.

As part of the Affordable Care Act, the government is trying to reduce the number of unnecessary re-admissions in hospitals. Roughly one in five Medicare patients are readmitted within 30 days. Traditionally, hospitals have have little incentive to ensure patient recovery and have in fact benefited financially when patients are re-admitted. The ACA attempts to force hospitals to focus more resources on a higher quality outcome after discharge. The penalty this year is 1% of these hospital base Medicare reimbursement. The penalty increases next year to 2%.

On the surface, a program that incentivizes quality should be considered a good one. No one wants to see a loved on have to return to the hospital because the discharge treatment plan wasn't a success. However, there are other factors that may be relevant. According to the New England Journal of Medicine article, "Thirty Day Readmissions-Truth and Consequences" written by Karen E. Joynt and Ashish K. Jha, often issues that arise after several weeks are beyond the control of a hospital. Some re-admissions (actually most) are not preventable. Drivers of re-admits like mental health issues, poor social support and poverty all effect the metric. Hospitals with high re-admissions are often serving a poorer socio-economic group which doesn't necessarily translate to substandard post discharge care. Also, the cost of reducing re-admissions may effect available fiscal resources for patient quality and safety within the hospital.

They add...

In fact, there are several factors influencing readmission rates that we would not want hospitals to change. For example, hospitals with a low mortality rate among patients with heart failure have higher readmission rates, presumably because they keep their sickest patients alive, and those patients are subsequently more likely to be readmitted.4 Similarly, given the close relationship between overall community-level hospitalization rates and readmission rates, communities that invest resources in outpatient care and thus are able to keep their healthiest patients from being hospitalized may see their readmission rates rise. Finally, whereas some studies have shown that sustained efforts can reduce readmission rates somewhat, others have shown that interventions aimed at improving care coordination and access to follow-up care actually increased the rate of readmissions, presumably because of improved access to needed care, with commensurate improvement in patient satisfaction.5 These interventions should hardly be seen as failures.

Joynt and Jha also suggest a shorter time frame of 3-7 days as a more appropriate time frame in which CMS should penalize facilities.

On the surface, its an admirable goal to reduce re-admissions. Its a sensible thing. Only time will tell if the effort turns out penny wise and pound foolish.

Sources:

Medicare To Penalize 2,211 Hospitals For Excess Readmissions - Kaiser Health News:

http://www.nejm.org/doi/full/10.1056/NEJMp1201598