Simple, But wrong, Approach on Readmissions

The tendency of government to impose crude performance metrics on hospitals is a well known phenomenon, but its use is growing as jurisdictions look for ways to cut their budgets.  The latest example is found in Massachusetts.

As reported by the MA Hospital Association:

Governor Deval Patrick’s FY2013 state budget proposal includes $40 million in rate cuts for hospitals. A significant portion of these cuts would be made through highly questionable policy changes. One of the more troubling policies would double penalties on hospitals for re-admissions that occurred in 2010.

The 2012 MassHealth acute hospital RFA – the main contract between the state and hospitals serving Medicaid patients — introduced a new preventable readmission penalty for hospitals that MassHealth determined had higher-than-expected preventable readmission rates.

Inpatient payment rates for 24 hospitals were reduced by 2.2% in FY2012. Now the administration is proposing to double the penalty to 4.4% in FY2013.  There are so many things wrong with this. First, as I have reported in the past:

Even if the readmission rate is the right metric to use for comparison purposes, we don’t have a model that would accurately compare one hospital to the others.  This suggests that the time is not ripe to use this measure for financial incentives or penalties.  It might give the impression of precision, but it is not, in fact, analytically rigorous enough for regulatory purposes.

Second, there is the issue of unintended consequences. Quoting from a study by researchers at Brigham and Women’s Hospital:

Given that many poor-performing hospitals also have fewer resources, they may suffer disproportionately from financial penalties for high readmission rates.  As we seek to improve care for patients with heart failure, we should ensure that penalties for poor performance do not worsen disparities in quality of care.

The MHA correctly notes:

The National Quality Forum and the state’s own Expert Panel on Performance Measurement had both previously rejected the measure that MassHealth used to impose its penalties.

MassHealth already has a Serious Reportable Event (SRE) policy that prohibits payments to providers when a readmission can be traced unambiguously to hospital care failures. There are many other instances, however, when a readmission has nothing to do with the care initially provided at the hospital.

Responsibility and accountability for readmissions, as with most patient health issues, is shared among hospitals, ambulatory care providers, long-term care/post-acute care institutions, public and private payers (including MassHealth), patients themselves, and patients’ families.

I know from my work with many MHA members that the hospitals in the state have been diligent in trying to work internally and with others along the spectrum of care to lower preventable hospital readmissions.  I think they are correct to oppose this flawed penalty the administration has proposed.  It now falls to the Legislature to reject the idea.

Paul Levy is the former President and CEO of Beth Israel Deconess Medical Center in Boston. For the past five years he blogged about his experiences in an online journal, Running a Hospital. He now writes as an advocate for patient-centered care, eliminating preventable harm, transparency of clinical outcomes, and front-line driven process improvement at Not Running a Hospital.

1 reply »

  1. I agree. The risk of perverse incentives with carrot/stick outcomes measures is serious, and for an example, look at the news today about teachers cheating, nation-wide, to prevent their schools for being hurt for poor performance.

    If you make outcomes the measure of quality care you will punish every hospital that treats more poor, more elderly, more sick patients. When they introduced an incentive scheme to the NHS sure enough they found doctors with the best performance treated fewer, younger, healthier, wealthier patients. Hospitals and physicians will consciously or unconsciously become more reluctant to help those that need the most help.

    Incentives and quality outcomes have to be tuned very carefully to avoid hurting those you most want to protect. There was a good article about it in last months Health Affairs that was pretty comprehensive.