Changing My Mind on SES Risk Adjustment

Ashish JhaI’m sorry I haven’t had a chance to blog in a while – I took a new job as the Director of the Harvard Global Health Institute and it has completely consumed my life.  I’ve decided it’s time to stop whining and start writing again, and I’m leading off with a piece about adjusting for socioeconomic status. It’s pretty controversial – and a topic where I have changed my mind.  I used to be against it – but having spent some more time thinking about it, it’s the right thing to do under specific circumstances.  This blog is about how I came to change my mind – and the data that got me there.

Changing my mind on SES Risk Adjustment

We recently had a readmission – a straightforward case, really.  Mr. Jones, a 64 year-old homeless veteran, intermittently took his diabetes medications and would often run out.  He had recently been discharged from our hospital (a VA hospital) after admission for hyperglycemia.  The discharging team had been meticulous in their care.  At the time of discharge, they had simplified his medication regimen, called him at his shelter to check in a few days later, and set up a primary care appointment.  They had done basically everything, short of finding Mr. Jones an apartment.

Ten days later, Mr. Jones was back — readmitted with a blood glucose of 600, severely dehydrated and in kidney failure.  His medications had been stolen at the shelter, he reported, and he’d never made it to his primary care appointment.  And then it was too late, and he was back in the hospital.

The following afternoon, I spoke with one of the best statisticians at Harvard, Alan Zaslavsky, about the case.  This is why we need to adjust quality measures for socioeconomic status (SES), he said.  I’m worried, I said. Hospitals shouldn’t get credit for providing bad care to poor patients.  Mr. Jones had a real readmission – and the hospital should own up to it.  Adjusting for SES, I worried, might create a lower standard of care for poor patients and thus, create the “soft bigotry of low expectations” that perpetuates disparities.  But Alan made me wonder: would it really?

To adjust or not to adjust?

Because of Alan’s prompting, I re-examined my assumptions about adjustment for SES. As he walked me through the data, I concluded that the issue of adjustment was far more nuanced than I had appreciated.

Here’s the key: effective socio-economic adjustment doesn’t reward providers for giving bad care to poor patients. It just ensures that they aren’t penalized for taking care of more of them. In my clinical example, if people like Mr. Jones had a higher readmission rate, adjusting for SES wouldn’t give hospitals credit for lower quality care to poor patients.  Done right, it would give credit to hospitals for having more poor patients, and that’s an important difference.  Consider three scenarios of hospital performance on a readmission rates (modified from our JAMA piece).

Screen Shot 2014-09-30 at 6.55.55 AM

In scenario 1 and 2, let’s assume that patients are readmitted 20% of the time on average, whether or not they’re poor.  In scenario 1, Hospital A (a safety-net hospital) has higher readmission rates for everyone.  They may have more poor patients, but their readmission rate is high for both poor and non-poor patients.  So, compared to Hospital B, they look worse in unadjusted and adjusted scores.  Adjustment doesn’t help.

In scenario 2, Hospital A has higher readmission rates for its poor patients and therefore has an overall readmission rate of 25%.  Hospital B doesn’t suffer from readmitting its poor patients too often – hence its readmission rate is 20.5%.  In this case, safety-net hospitals look worse than Hospital B in both unadjusted and adjusted analyses.  Again, adjustment doesn’t help.

In scenario 3, Hospital A and B both struggle with readmissions for their poor patients – as does the rest of the country.  The only thing that differentiates Hospital A from Hospital B is the proportion of poor patients in the hospital.  In this case, adjustment makes a big difference.  By adjusting, we account for the different proportions of poor patients between Hospital A and B.  Adjustment ensures that organizations are judged by how well they care for their patients, not by how many poor patients they have.

Screen Shot 2014-09-29 at 7.38.04 AM

One Size Does Not Fit All

The debate about whether to adjust for socioeconomic status needs to be far more nuanced than it has been to date.  Specifically, we must recognize that quality measurement has multiple purposes, and we need to think about each one when deciding whether to adjust or not.  If the goal is transparency –letting patients know how they are likely to fare – then the best approach is stratified data. In scenario 3 (where adjustment makes a difference) a poor patient will do about as well at both hospitals – and unadjusted numbers are misleading, because they tell poor patients that hospital B is better.  If Hospital B has a larger co-pay or is out-of-network, you have done real harm by pushing a patient to a more expensive place that doesn’t provide better care.

To push hospitals to improve quality, unadjusted numbers are best.  In all three scenarios, Hospital A should be more motivated to get better than Hospital B because for its patients, it tends to have worse performance.  But in each scenario, the hospitals need stratified data. Without it they will have no idea where to target their efforts.

For penalties, we should use adjusted data.  It will make no difference in scenarios 1 and 2.  But, in scenario 3, it makes little sense to penalize the safety net hospital compared to other hospitals just for taking care of more poor patients.  That’s not a smart policy.  Penalties for bad care for poor patients?  Sure.  Penalties just for caring for more poor patients?  Not so sure.

 A way forward

The bottom line is that the care of poor patients is not evenly distributed across all U.S. hospitals.  Some hospitals have a lot more patients like Mr. Jones than others have.  And caring for people like him, who are homeless and without a social network, is challenging.  None of us are very good at it.  Why penalize the safety-net hospitals just for taking care of more poor patients?

Given the concern that safety-net hospitals may be disproportionately penalized, a bi-partisan group of Senators (3 Democrats and 3 Republicans) has signed on to a bill that would require CMS to account for SES when it doles out penalties for the HRRP (Senate Bill 2501).  It’s an excellent start.

Adjusting for SES is an acknowledgement that medicine is not the only factor – and indeed may be a relatively minor factor – in health outcomes. For Mr. Jones, homelessness and poverty clearly contributed to his readmission to the hospital. Bad medical care did not. We should have no qualms penalizing safety-net hospitals for providing sub-standard care.  But we just shouldn’t penalize them simply because they have more poor patients.


15 replies »

  1. A thoughtful and persuasive post. I don’t agree that measures should be SES adjusted, but I do believe payment formulas should.

    The debate over SES risk adjustment is not about whether economic background impacts health, I think all of us agree it has significant impact. The issue is whether we should be permitted to obscure the measure through adjustment to account for that difference. I believe obscuring the measure obscures the people counted underneath that measure, which is a bad idea in general.

    We should measure without SES adjustment, but we should pay for care with it. Incentive levels around readmissions can and should be tied to the SES realities of hospitals. In other words, hospitals with a higher population of poor patients would have that weighted in the formula for their payment. Another advantage of not messing with the measure is that over time we truly understand the progress of hospitals in meeting the needs of these challenged populations.

  2. thank the lord. the director of some harvard institute who doesn’t actually practice medicine anymore (correct me if I’m wrong) has concluded that patient background, education, and economic status matter when it comes to measuring health outcomes.

    Wow. Who would’ve thunk it.

  3. lawyerdoc, the problem with Medicaid is few docs accept it.

    Obamacare is not single pay – it’s private insurance subsidies, for the most expensive system in the world.

    The problem with employer insurance is not all employers want or can pay for it. Do MacDonald employees have the same, “separate is unequal” constitutional right?

  4. @Steve: “The care for those that make it into the VA system is actually better by most measures.”

    What does that mean? Are all measures that evaluate ‘betterness’ equal? Do we average them? Those that create the metrics that decide ‘betterness’ also decide the results.

    I think the VA has worse care, but can cover it up much more easily than our private facilities. Isn’t that what we have seen recently?

  5. Good points about how to “transform” the VA payment scheme to “private” insurance – but I think that would be pretty easy: Medicaid requires zero (or almost zero) copays, meds are free, accepted by almost all docs and 100% of hospitals.

    Or, VA pts could be given the equivalent of what our elected officials choose for themselves, which is a large array of private, low to no cost health plans with varying coverages.

    Also agree that no healthcare system is “model,” but I’m not the one pointing to “single payor” or “government controlled” as the ideal, that would be the folks trying to tell us how great obamacare is/will be.

    I personally think the “ideal” system is to provide all citizens (note, I said CITIZENS!!) a LIMITED coverage program that includes preventative services and probably catastrophic coverage. Otherwise, let the market system continue to do what it does best, which is allow companies to compete for good employees, and offer health care coverage to their employees. If you want to have the high dollar health benefits, then either pay for it or maybe your employer will help you pay for it.

    The problem with Medicaid is that it is so massively abused. It is nothing but a 24 hr a day free clinic credit card. And worse, review of outcomes of Medicaid patients (with their totally free care) tend to show they do worse (or no better) than many patients who actually lack any insurance coverage!!!!

  6. “I don’t understand why the VA doesn’t just give all veterans the equivalent of private insurance and let them use ANY doctor or ANY hospital they choose.”

    lawyerdoctor, what payment method would be used, Medicaid rates, Medicare rates? Full insurance rates? What about co-pays/deductibles? The VA is FREE – totally.

    Having multiple healthcare systems that co-exist is redundant, wasteful, and, as our own US Supreme Court once said, “separate is inherently unequal.” (Brown v. Board, 1954).”

    Would that apply to out present system of Medicaid, Medicare, multiple insurance schemes with different rules and payment methods?

    I don’t believe any health care “system” can be viewed as “model”. They all require trade-offs and constant managing and adjustment.

  7. Thanks Steve,

    Wasn’t trying to dump (completely) on the VA. I have worked in many (including some in very warm climates so know of the warm weather phenom you indicated). My point was to show how certain folks with a definite political agenda used the VA as a “model” healthcare system when it clearly is NOT.

    I don’t understand why the VA doesn’t just give all veterans the equivalent of private insurance and let them use ANY doctor or ANY hospital they choose. Having multiple healthcare systems that co-exist is redundant, wasteful, and, as our own US Supreme Court once said, “separate is inherently unequal.” (Brown v. Board, 1954).

    Agree also that giving free stuff to people doesn’t always (or ever?) make them happy, grateful, or pleased to have it, especially if they have underlying psychiatric diagnoses.

    Funny how the government is always trying to measure “quality” in areas they know absolutely NOTHING about, like healthcare. They are a bunch of blind men groping an elephant. Historically, there were people who knew which hospitals and doctors were “good” and which ones were not. Those people were called “DOCTORS” and they referred their patients to the “good” hospitals (and specialists) and quietly advised them to avoid the “bad” ones.

    Now that task of advising the patient has been superseded by the all-knowing bureaucrats, because the evil doctors can’t be trusted to inform their patients, I guess?? I suppose it’s the “golden rule,” i.e., whoever has the gold, gets to make the rules?

  8. While adjusting for SES makes sense, in theory, for both hospitals and schools, I’m not sure how to do it in a way that captures either the risk of a hospital readmission or the likely cost of insuring them with any precision. For hospital readmissions, it might make more sense to just allow hospitals to eliminate patients who show clear evidence of non-compliance with medical recommendations, including taking prescription drugs, whether they are low SES patients or not. Alternatively, whenever the hospital can demonstrate that its discharge planning was sufficiently thorough to meet some adequate and appropriate standard of care criteria, it should count as a beyond our control readmission, not a preventable readmission subject to possible penalty.

  9. They have the same issue in education. They judge schools based on how well their students score on tests. But obviously its not just about the actual raw test scores. If you students were terrible last year you adjust for that. Should you also adjust for free or reduce price lunch, race, etc? Everyone seems to agree that you should, although I think it doesn’t matter since previous test scores are almost a sufficient statistic. Still, I don’t know why it is controversial in medicine.

  10. CMS is not about nuanced decisions; they need to save the Medicare Trust Fund so they refuse to acknowledge the nuanced arguments supporting SES adjustments of readmission penalties and continue to insist that high patient satisfaction is always associated with high quality of care (and continue to ignore data to the contrary along with the epidemic of opiate abuse that has resulted). To admit otherwise would threaten their attempt to save the Fund.

  11. Nope, you have it wrong. The care for those that make it into the VA system is actually better by most measures. Note that the veterans groups don’t want to do away with the VA. They already know this. The problems with the VA are many, but two that are very relevant here are the fact that the VA expanded eligibility without having the resources to provide for all of those newly eligible. Also, while this hit many VA facilities, it was especially bad in places like Phoenix, where they face major seasonal changes in patient volume.

    As to the homeless, that is always complicated. Some of them won’t stay in a home even if you find them one. For those, SES makes even more sense. Not much we can do about those folks. However, for those willing to stay, the Housing First programs seem to be working well, and appear to be more cost effective.


  12. Social determinants of health matter.

    A common sense post. Well done, Dr. Jha (or Jhajee).

  13. Ok, I’m confused.

    Mr. Jones has the VERY BEST HEALTHCARE that the US has to offer, i.e., through the VA medical system, and its TOTALLY FREE to him, including his medications, right??

    I mean, all those people who keep telling us the fantastic advantages of “Obamacare,” and pushing the “single payer system” on us are constantly holding out the VA as the shining example of a wonderful system by which the federal government provides outstanding medical care to happy, pleasant, satisfied patients. At least, they DID until just a few months ago when people actually found out it was all a big lie.

    So what exactly is the problem here? Mr. Jones has free care and free medicine, but he doesn’t have a place to live. Is that the fault of the hospital? the physician? In truth, Mr. Jones may be simply a “bad” patient. He is not receiving “bad” care. There IS a difference, regardless of how many policy wonks at Harvard tell us there isn’t.

    If Mr. Jones is homeless because he has severe psychiatric issues (which is highly likely, since a huge majority of homeless are actually psych patients in disguise who have been “emancipated” from the supposed horrors of institutionalization) – then wouldn’t it be better for Mr. Jones to be in a longitudinal care setting? or is it far better for him to be homeless, sleeping over a grate, being robbed and raped and exploited, and in turn exploiting the ER with multiple turnstile visits and admissions, than to receive three hot meals a day, medications, medical care, counseling, nursing, etc. in a controlled environment?

    Yep, we really did these folks some HUGE favors by eliminating the constraints on their “civil rights.”

  14. We do have a system that adjusts for SES – it’s called Medicaid.

    Don’t expect states, who now want to divest of Medicaid obligations, to pay more (or even the same) for people like Mr. Jones.

  15. From the way I see it , hospitals who care for lower SES patients should actually be paid more and incentivized for care, not penalized.
    The ” one size fits all” notion seems to be ingrained in how the government is treating medical care, and that’s not at all how it should be.