A recent New York Times article noted a "growing chorus of critics” questioning the fairness of new Medicare financial penalties on hospitals with high readmission rates. While it was certainly a well-written piece about a topic more people need to understand, the article paints an incomplete picture about the debate and goes too far in portraying hospitals as victims (although appearing in the Business section, maybe that’s not too surprising).
Since I gave a brief talk a few weeks ago at the American Society on Aging meeting that could be construed as adding to the critical chorus, I thought I'd try to provide additional context. I hope to point out the real story, which is less about fairness—or lack thereof—to hospitals, and really about how the robust debate occurring right now represents a sea change in the way hospitals and our health care systems think about accountability for their patients.
And that’s a good thing.
First, a recap of the policy. As part of the Affordable Care Act Section 3025, hospitals now face financial penalties based on their rates of readmission within 30 days of discharging patients with three specific conditions: acute myocardial infarction (heart attacks), congestive heart failure, and pneumonia. The idea is that these conditions, and others to be added in 2015, are actually manageable outside the hospital with the proper discharge instructions and follow-up care.
Medicare estimates that readmissions in 2010 cost the program more than $17 billion, with a large percentage of these preventable. In order to incentivize hospitals to reduce these costs, penalties of 1 percent of all Medicare payments to a hospital (to increase to 3 percent in 2015) are levied on those hospitals that exceed expected rates. Medicare is already expecting to receive about $280 million from over 2,000 hospitals to be penalized in 2013.
Cost is not the only issue. We know hospitals can be dangerous for older adults. (A 2010 Office of the Inspector General report showed that 14 percent of all hospitalized Medicare beneficiaries experienced significant adverse events including 180,000 deaths.) To further raise the stakes, these 30-day readmission rates are also now included in public hospital quality reporting, through Medicare’s Hospital Compare website.
The Times article rightly points out the vigorous debate about the Medicare Hospital Readmissions Reduction Program. Data already shows the winners and losers in this game, and those hospitals with the sickest patients (safety net hospitals) and poorest patients (academic health centers) will indeed bear the highest burden of these penalties. This raises real questions about potentially creating disincentives to care for challenging patients in communities that are already underserved in so many ways.
To support this argument, the Times article cites a New England Journal of Medicine perspective piece by Harvard School of Public Health researchers Karen Joynt and Ashish Jah, pointing to their criticism along these lines. Unfortunately, the most important part of their piece is never discussed: how to make the policy better. Joynt and Jah actually note the potential benefits of the policy and advocate for making adjustments and refinements (as should happen with all policy), such as factoring in socioeconomic status into readmission rates.
At a national forum on care transitions at the American Society on Aging conference last month, I happened to cite Dr. Jah, who had previously blogged about how hospital readmission rates don’t serve well as overall quality measures for hospitals. As shown by Beeson Scholars Harlan Krumholz, Joe Ross, and others in the Journal of the American Medical Association, readmission rates have a low correlation to mortality rates—which if risk-adjusted could be viewed as a gold standard for high quality.
I cited Dr. Jah as part of a response I was asked to give regarding the intense national focus on 30-day readmission rates and how they often seem to be the ultimate measure of success in health care. (I should mention that this session at ASA was largely driven by the $500 million Community Based Care Transitions Program, initiated by Medicare to reduce hospital readmission rates by 20 percent by 2015. This important program brings Area Agencies on Aging and other community-based organizations to the table with hospitals to partner in creating safer transitions between health care settings.)
In that discussion, I also cited questions raised last year by Mary Naylor and others about unintended consequences of the readmissions policy, particularly for frail, vulnerable older adults. For example, to reduce their readmission rates, would hospitals potentially game the system, holding patients in “observation” where adequate care might not be delivered?
Probably the biggest concern raised by myself and several others was whether the focus on hospitals and their readmission rates is really enough if we are truly concerned about health and not just costs. While it is important to focus on the often-dangerous transition out of the hospital, we need better overall care coordination and financial structures to achieve the health outcomes we really want for older adults with complex health conditions. We need to focus on keeping people healthy in the community and not admitted to the hospital in the first place.
The robust debates about hospital readmission policies have already sparked promising suggestions for refinements and modifications. See Will The Readmission Rate Penalties Drive Hospital Behavior Changes? by Nikhil Sahni, David Cutler, and Robert Kocher in a February Health Affairs blog post and The Effect of Medicare Readmissions Penalties on Hospitals' Efforts to Reduce Readmissions: Perspectives from the Field on the Commonwealth Fund’s blog as examples. The Commonwealth Fund post looks at the readmissions policy from the perspective of state and local hospital leaders involved in the STAR initiative. These recommendations include refinements to the calculations for penalties, as well as broader suggestions around the need to help hospitals identify the right tools and interventions to achieve the desired reductions and lower costs.
I believe that the discussions over refinements and modifications to the readmissions policy, as well as the exploration of related unmet policy needs, are indicative of major steps forward that we are taking as a country. Hospitals—even those in very challenging environments—are now thinking about what happens to their patients when they leave the hospital. And they should. They are starting to talk with social services agencies and are coordinating better with primary care providers. And it’s about time.
The New York Times article I mentioned may have brought attention to the issue of hospital readmission to people outside the health policy world, but it missed these important points. In fact, it ended (too sensationally, in my opinion) by raising the specter of potential harm to patients by these efforts.
I would argue that, ultimately, with further improvement and with additional accompanying policy changes, we will actually save lives and keep older adults and others healthier outside the four walls of the hospital, while helping to contain the costs that threaten our country’s financial health. The need to make refinements and modifications to a new policy, especially one tackling such a complex and important issue as hospital readmissions, is not uncommon. In fact, it’s essential.
That’s the debate in which many of us have been engaged. And that’s the debate that will lead to better care for older Americans.