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Hospital Readmission Reduction Program is a dud

October 1, 2019

Topics: Quote of the Day

By Jordan Rau
Kaiser Health News, October 1, 2019

Medicare cut payments to 2,583 hospitals Tuesday, continuing the Affordable Care Act’s eight-year campaign to financially pressure hospitals into reducing the number of patients who return for a second stay within a month.

The severity and broad application of the penalties, which Medicare estimates will cost hospitals $563 million over a year, follows the trend of the past few years. Of the 3,129 general hospitals evaluated in the Hospital Readmission Reduction Program, 83% received a penalty, which will be deducted from each payment for a Medicare patient stay over the fiscal year that begins today.

These figures do not include 2,142 hospitals that Medicare exempted from the program this year, either because they had too few cases to judge; were veterans hospitals, children’s hospitals, psychiatric hospitals or were critical-access hospitals, which are the only hospitals within reach of some patients.

The hospital industry and some academics have raised concerns that some hospitals may be avoiding readmitting patients who require additional inpatient care out of fear of the financial repercussions, while others have said the program is not showing major benefits.

A few studies have even found an increase in mortality since the penalties took effect, but other studies, including a recent one by the Medicare Payment Advisory Commission (MedPAC), an independent body that helped devise the approach for Congress, identified no such link.

The MedPAC staff’s preliminary analysis, made public last month, found that the frequency of Medicare patients being readmitted within 30 days of discharge dropped from 16.7% in 2010 to 15.7% in 2017.

The penalties are based on the frequency of readmissions of Medicare patients who had originally been treated for heart failure, heart attack, pneumonia, chronic lung disease, hip and knee replacement or coronary artery bypass graft surgery.

“This is like driving your car by looking in the rearview mirror of the car three cars behind you,” Dr. Jonathan Perlin, the chief medical officer of HCA Healthcare in Nashville and a MedPAC commission member, said at last month’s meeting. “It’s very difficult to operationalize.”

Akin Demehin, director of policy at the American Hospital Association, said: “It raises the question: Is the value of the program to improve care or just to enact penalties on hospitals?”



By Don McCanne, M.D.

The Medicare Hospital Readmission Program is a penalty program, not a rewards program. It assumes that patients are readmitted after a recent hospitalization because of errors or omissions on the part of the hospitals, and thus the hospitals should be punished. But these are patients who were treated for heart failure, heart attack, pneumonia, chronic lung disease, hip and knee replacement or coronary artery bypass graft surgery. These are disorders that have a high rate of complications or protracted courses and thus would be expected to have a high rate of need for readmission even though given optimal care and followup.

And think about this. Most (83%) of the hospitals evaluated under the program can look forward to a year, and likely many years, when they provide exemplary care for most of their patients and yet they will be financially penalized for each patient for whom they provide care, regardless of how great that care is. That should certainly contribute to the epidemic of burnout.

This program is a dud and should be abandoned if for no other reason than it is a distraction from the need to advance reform that would be greatly beneficial to patients: enactment and implementation of Single Payer Medicare for All. Instead of playing around with gaming through penalties, let’s direct all of our attention to caring for the patients. That’s really what it’s all about.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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