Is the Readmissions Penalty Off Base?

I’ve been getting emails about the NY Times piece and my quotation that the penalties for readmissions are “crazy”.  Its worth thinking about why the ACA gets hospital penalties on readmissions wrong, what we might do to fix it – and where our priorities should be.

A year ago, on a Saturday morning, I saw Mr. “Johnson” who was in the hospital with a pneumonia.  He was still breathing hard but tried to convince me that he was “better” and ready to go home.  I looked at his oxygenation level, which was borderline, and suggested he needed another couple of days in the hospital.  He looked crestfallen.  After a little prodding, he told me why he was anxious to go home:  his son, who had been serving in the Army in Afghanistan, was visiting for the weekend.  He hadn’t seen his son in a year and probably wouldn’t again for another year.  Mr. Johnson wanted to spend the weekend with his kid.

I remember sitting at his bedside, worrying that if we sent him home, there was a good chance he would need to come back.  Despite my worries, I knew I needed to do what was right by him.  I made clear that although he was not ready to go home, I was willing to send him home if we could make a deal.  He would have to call me multiple times over the weekend and be seen by someone on Monday.  Because it was Saturday, it was hard to arrange all the services he needed, but I got him a tank of oxygen to go home with, changed his antibiotics so he could be on an oral regimen (as opposed to IV) and arranged a Monday morning follow-up.  I also gave him my cell number and told him to call me regularly.

Much of the weekend went smoothly.  When I talked to him on Sunday morning, he reported having slept poorly but had a joyful tone in his voice that I never heard in the hospital.  He was planning on having a few beers with his son and watching the Patriots game.  I told him to take it easy on the beers.

Sunday afternoon, I caught him during half-time and he assured me everything was fine.

On Monday morning, I got a call that Mr. Johnson was back in the hospital. I rushed to his room to see him lying in bed, looking sad.  He told me that his breathing had gotten worse overnight and at 3 a.m., his son drove him to the hospital.  His vital signs looked fine, although his oxygenation was a little worse than Saturday.  He screwed up he said, and that I was right.  He should not have gone home.  I asked if he had enjoyed the weekend – his face lit up.  He had loved it.  Let’s be clear:  he had been right to go home. There was no screw up.  We had gotten him a weekend at home with his son who would soon be heading back to Afghanistan.

In 2012, more than 100,000 Americans will die in U.S. hospitals because of medical errors such as preventable infections, receiving the wrong drug, or having the wrong surgery.  Even more Americans will likely die because they failed to get simple therapies like the right antibiotic for their pneumonia.  Millions of people will report suffering in the hospital from undertreated pain or the indignities of not being always treated with respect.  Yet, the Affordable Care Act says that my “mistreatment” of Mr. Johnson – sending him home and having him come back – was far more egregious – the one that deserves the biggest penalties.  While the ACA is extremely important in improving access to millions of Americans, several of the provisions to improve the “delivery system”  are not quite right.  The notion that readmitting people to the hospital is worse than killing them due to medical errors?  Sorry, but that is crazy.

The Leapfrog Group will be putting out another report of patient safety in U.S. hospitals (I’m on their advisory panel).  It will provide letter grades on the state of safety of every hospital.  The grading system is not perfect – primarily because hospitals are not required to report their rates of medical errors. Yet, Leapfrog soldiers on, trying to make their best assessment.  I wish Medicare would make patient safety half as much of a priority as reducing readmissions.  Oh and by the way?  Reducing medical errors can likely save us a lot more money than reducing readmissions — so even if we do it for the money, that should be our target.

So – should we penalize hospitals for readmissions?  I think its probably fine (although we should know that we will primarily end up penalizing hospitals that care for the sickest and poorest patients).  But by putting so much energy on readmissions and so little on patient safety, we have made our priorities clear, and I think they are the wrong priorities.

If my hospital had made my readmission rate part of my performance evaluation, would I have sent Mr. Johnson home that weekend? May be not.  I could have easily strong-armed him into staying, and he would have listened.  He was, what we call, a “compliant” patient.  But if we had kept him in the hospital — he would have lost — lost the chance to watch the Pats game with his son.  His son and family would have lost – having the weekend with their dad and husband.  But, I would have “won”, coming across as a better doctor for having a lower readmission rate.

Policies have consequences.  They set up subtle, often perverse incentives.  Before we decide that readmissions are the biggest priority for cleaning up American hospitals, we should ask whether Mr. Johnson should have been sent home that weekend.

Ashish Jha, MD, MPH is the C. Boyden Gray Associate Professor of Health Policy and Management at the Harvard School of Public Health. He blogs at An Ounce of Evidence.

27 replies »

  1. You are right. Sending him home was the best decision at that time. Because at that time he need his family more that any hospital and he need the time with his son also.

  2. D’cm — Or, perhaps instead of readmitting patients — who may actually need to be hospitalized — patients will simply be shuffled off to another hospital’s ER. Don’t think for a minute that any hospital will readmit a patient and risk Millions. So I expect to see sister hospitals, i.e., hospitals within the same Accountable Care Organization (ACO), come to some sort of agreement to take each other’s re-admissions. Look at it as a well-orchestrated form of “hospital hopping.” ;~)

  3. Rebecca, I am having trouble differentiating between a medical and a social decision. The physician made the right decision for his patient at that particular moment, bringing into account all factors affecting one’s health and well being.

    Why are we even bothering with “patient-engagement”, “whole-person orientation”, “patient-centered”, etc. ?
    If every decision was made by a good process as the one Dr. Jha is describing here, and for the reasons he is describing, I for one am OK with paying $10,000 in these situations.

    And patients do bear both the upside and the downside. Perhaps neither the upside or the downside can be measured in dollar bills, but the patient is bearing them both, much more than any other distributed “stakeholder”.

  4. Cynthia, I have to disagree. In fact I believe it is just the opposite, faced with decreased reimbursement providers will attempt to make up the loss with increased volume. It is this focus on quantity over quality that is at the heart of the poor return we get from total healthcare dollars spent. As was pointed out earlier, the readmission penalty only effects hospitals that exceed an average number of readmissions. Hospitals are dependent on admissions and many actually encourage the PCPs to readmit to keep the census high. There are PCPs that make a good living by keeping their personal hospitalized census high, so are happy to cooperate. As Dr Gawnde stated, they will feed at the trough until it is taken away. This rule is a start.

  5. So true, and unless you are in an integrated system, that hospital (by law) and the payers pass none of those savings on to you when you do manage to prevent a readmission.

  6. Complicated by the fact that docs seeing sick Medicare patients as outpatients are so poorly paid that they’re glad to send the patient back to the ER to get admitted again and again and again. It’s hard work keeping sick patients out of the hospital.

  7. But because the hospital industry totally eclipses the home health industry in terms political clout and lobbying power, home health agencies will be subjected to far more cuts than hospitals. It’s like the Pee-wee League trying to buck heads with the NFL.

  8. Margalit in an ideal world it could work that way, but its simply hogwash in an imperfect market when people don’t make rational decisions as they don’t bear both the upsides and downsides. I’m not calling the physician or patient irrational in a mean-spirited way, I’m stating a basic economic truth.

    Insurance should get out of the way when physicians make medical decisions. This was not a medical decision but a social one that asked insurance to pay for an emotional desire, albeit one we can all understand. Separate out the part of this story that pulls at the heartstrings and look at the hard facts. The physician and patient asked society to foot a ten thousand dollar bill so that he could visit with his son at home instead of the hospital.

    Perhaps it is the readmission policies and situation like these that will spur hospitals, as another commenter mentioned, to set up exceptional home health services so that we can have the best of both worlds.

  9. It would be a lot easier and a lot less painful, as well as a lot less costly, for everyone involved if Medicare would simply reduce Medicare reimbursements across the board or make across-the-board cuts to the Medicare budget, instead of requiring hospitals to jump through very costly and rigorous hoops (which often times leads to gaming the system, or even borderline fraud) in order to prevent from being slapped with millions of dollars in penalties for not preventing re-admissions, which are totally impossible to prevent in the first place.

    Apparently the good folks at Medicare don’t understand that hospitals are gonna be saddled with an enormous amount of overhead and administrative costs just to track and monitor patients who are at high risk for being readmitted within a 30 day time frame and then to do everything in their power, both in terms of going full throttle on clinical and managerial intervention, to prevent them from being re-admitted. But I think the Medicare folks are too smart NOT to understand this.

    So, what I think is REALLY going on here is that the Medicare folks don’t want to come across as the big, bad hatch-swinging villains, who are out to pull the plug on Grandma. Instead of doing the easiest, least painful and least costly thing for everyone involved, which is to simply reduce Medicare reimbursements across the board or make across-the-board cuts to the Medicare budget, the Medicare folks are setting hospitals up to be viewed as incompetent failures in the eyes of the public, which gets themselves off the hook for being the big, bad hatch-swinging villains, who are out to pull the plug on Grandma!

    It bears repeating: Our biggest problem in healthcare isn’t lack of quality, it’s lack of cost constraints. The folks at Medicare just don’t want to admit this.

  10. Why not let Dr. Jha and his patient figure these things out between them? Why not provide everybody timely information necessary to make fully informed decisions and trust that they will make the right decisions… for Mr. Johnson?

  11. Because KP doesn’t get paid for hospital admissions (well not most of them) so they have an incentive to treat the whole patient most effectively & cheaply. Most hospitals don’t have that incentive

  12. So it all comes down to this–paying hospitals for admissions (i.e. a lump sum for a lump service) is dumb public policy. Changing how you pay them, by admission/re-admission or omission doesn’t make the original policy not dumb.

    Instead someone (preferably a warm and cuddly non-profit HMO run by a board of patients and doctors who car about public health and overall community health costs) should have been paid a lump sum to keep Mr Johnson healthy and been worried about his overall costs AND his satisfaction. Then you could have sent him home and readmitted him for the cost of a taxi ride both ways.

    Theoretically that is what the ACO regs do. So lets hope to hell they get that part right.

  13. Dr Georgiou’s excellent points aside. Did you, Dr Jha, work with the unit case manager to provide the necessary therapies in the out patient setting that could have made this a successful discharge? Was there visiting nurse services, oxygen, scheduled follow up with pulmonology or home or outpatient IV therapy? Could these have been set up while the patient was still in observation and have avoided an admission altogether?

  14. Great point David re other hospitals successfully bringing down readmission rates. While many hospitals will argue its because they Kaisers only provide commodity care and they are the ones taking care of the medically complex patients, that argument doesn’t hold up when you compare the same commodity patients at academic medical centers against Kaiser. They still underperform. (and Kaiser increasingly take care of MCPs with similar if not better outcomes…)

  15. Rebecca, you bring up a great point about third party payers. We, in the US, are so anesthetized from the cost of care that patients don’t think about the value of each decision in financial as well as value terms. Patients in many other countries don’t have that option and have to consider their personal expenses in each choice they make.

    In defense of Ashish, I don’t think the idea was to bring up a rare anecdotal incident and use it as a marker for how the upcoming ACA measures will be inappropriate. I think it was meant more to say that Readmission data, without the overall context of care, is a limited measure to assess quality.

  16. The case cited is for a relatively infrequent logistic reason — an infrequent and brief visit from a son at war which could justify an early hospital discharge. This is analogous to women who wish to electively induce labor before 39 weeks of gestation because their husband is going off to war and possibly never have a chance to see his child for which there can be a logistic justification for an early induction.

    However, these relatively rare logistic reasons for an early hospital discharge or an a pre-39th week elective induction are a relative rarity and not the norm.

    Hospital groups such as Kaiser Permanante (KP) have implemented programs that reduce rehospitalizations with savings to Kaiser as well as increasing patient quality of life and life expectancy. The question is that if KP is doing this for their patients, why aren’t other hospitals?

  17. I’m not sure what you want the government to do? Every black and white rule has unintended consequences – whether it be corporate or government, because people don’t operate their lives in black & white.

    Every time you put an “open to disgression” loophole into a rule you create opportunity to blow your budget from abuse.

  18. Letting him have the weekend with his son was the right thing to do. Wearing my case management hat, I might have suggested getting the gentleman to sign out AMA. Same result but provided a little insulation to the physician and hospital against the readmission ding.

  19. I’m going to play the devils advocate here– while going home was certainly better for the patient’s morale and I feel for his situation and the hard spot it put the author in, if the readmissions payment policies were not in place Medicare and taxpayers would be footing the bill for the second, expensive trip through the emergency department, the blood cultures that were redrawn, CXR, etc (and the ambulance, depending on how he arrived). I don’t think its the responsibility of the US government to so blatantly pick up the tab for a calculated risk by an individual.

    It was the medical opinion of the physician that the patient was not ready to go home. If the patient would have been weighing responsibility for the extra cost of a readmission when making his decision, I bet he would have chosen to watch football with his son from the hospital bed. But like so many things in medicine, third party payers mean patient’s don’t think about the true cost of their decisions.

  20. Thank you, Archelle, for injecting some sensible perspective beyond the “this bad story will happen when the government sticks its nose between the patient and his well-meaning, but beleaguered doctor” business that’s been articulated above.

    Ashish, is it really sound policy to ask if Mr. Johnson should be sent home before deciding to focus on readmissions? I think not. I think, as Archelle suggests, that we should focus on data and the nuance of policy, not stories and simplistic renditions of what the policy is. And, as you say, we should focus much more effort on patient safety and reducing medical errors. Both-and, not either-or.

  21. Ashish, while your story is compelling….it is an N = 1. As you know, the “formulas” that CMS uses to calculate the penalties:
    1) DO NOT penalize hospitals for individual readmissions. The penalties are based on aggregate readmission data.
    2) DO NOT assume that all readmissions are avoidable or reflect bad care. The penalties are incurred when hospitals exceed an average readmission rate that has been achieved by other hospitals.

    So I’d argue that
    –Yes, you used your judgement and did the right thing in discharging him early
    –No…you won’t get penalized by CMS for agreeing to discharge your patient earlier than when he was ready since the penalties are incurred by the hospital
    –No…your hospital won’t get penalized since this is a single data point contributing to the facilities readmit rate.
    –Yes…if your hospital has above average readmit rates…there should be a penalty since it most likely reflects a systemic issue with the quality of care.

    No data set, especially in healthcare, is perfect. But, your story wasn’t data

  22. I think that I’ve been under the impression that the academic hospitals that tend to treat the poorest and sickest patients rely less heavily on their reimbursement. Don’t many of them have other sources of funding that might offset 1% reduction?
    I’m just curious. Not trying to be antagonistic.

  23. This is an excellent story of what happens when the government creates a non-natural incentive. ACA (and I am a supporter) is full of them, ways to try to force behaviors that create unintended consequences…and as you mentioned allow hospitals to take their eye off the Leapfrog Group ball. If I were a patient or even a payor, give me a hospital with a high Patient Safety Score over one with a low readmission rate any day.

    There is another major problem with readmissions as a standard: There simply aren’t that many truly avoidable readmissions. Yours was “avoidable” but at what cost to the patient’s morale?

    And when you create an artificial metric like this, you get gaming. Have you looked at observation stays lately? Off the charts, because they don’t count as an admission.

  24. Vince, the problem is that the readmission is actually considered a ‘complication’ and is a ding against the physician’s care. As public reporting becomes more widely used as a way to determine the quality of someone’s work as well as their reimbursement, it’s going to become a very big issue.

    Ashish – you’re right on target with the comment about penalizing hospitals that care for the poorest and sickest. This will also be one of the challenges facing academic centers. I already know many physicians who are anticipating not caring for the most sick patients because it will impact their quality numbers, public rating and financial reimbursements given the link of their income to quality. Theoretically, risk adjustment should account for much of this but then you end up dealing with the issue of appropriate documentation and capturing of information. A very frustrating sequence of issues that I agree, with lead to many unwanted consequences.

    But the idea of focusing on readmissions is in part to prevent gaming of the system – hospitals often discharge someone a little early to meet their days of hospital stay guidelines and the idea is to prevent these discharges by linking them to readmissions, thus preventing the discharge of patients that should have resulted in additional cost on the front end to provide appropriate care. How would this issue be managed otherwise, and who was it that set up the new planned for system if not people like yourself and Leapfrog??

  25. You did the right thing in sending Mr. Johnson home for the weekend so he could spend time with his son.

    Under the “old” system, the hospital would have been paid for two admisions — one for before the weekend, one for the readmission after the weekend.

    Under the “new” system, the hospital presumably will be paid for only one admission — the time that Mr. Johnson spends before and after the weekend effectively gets lumped into one hospital stay.

    So what’s the problem here?