When persons are admitted to a hospital, insurers’ payment rates are based on the diagnosis, not the number of days in the hospital (known as a “length of stay”). As a result, once the admission is triggered, the hospital has important economic incentive to discharge the patient as quickly as possible. My physician colleagues used to refer to this as “treat, then street.”
Unfortunately, discharging patients too soon can result in readmissions. That’s why I have agreed with others that diagnosis-based payment systems and a policy of “no pay” for readmissions were working at cross purposes. Unified bundled payment approaches like this seem to be a good start.
But that’s all theoretical. What’s the science have to say?
Peter Kaboli and colleagues looked at the push-pull relationship between diagnosis-based payment incentives and the likelihood of readmissions in a scientific paper just published in the Annals of Internal Medicine.
The authors used the U.S. Veterans Administration (VA) Hospital’s “Patient Treatment Files” to examine length of stay versus readmissions in 129 VA hospitals. The sample consisted of over 4 million admissions and readmissions (defined as within 30 days and not involving another institution) from 1997 to 2010. The mean age started out at 63.8 years and increased to 65.5 years, while the proportion of persons aged 85 years or older increased from 2.5% to 8.8%. Over the years, admissions also grew more complicated with a higher rate of co-morbid conditions, such as diseases of the kidney (from 5% to 16%).
As length of stay went down, readmissions should have gone up, right?
Few diseases invoke more fear in patients and families than dementia (e.g., Alzheimer’s Disease (AD), progressive multiple sclerosis, Pick’s Disease). Surveys have shown the fear of dementia—especially AD—far outweighs concerns of a diagnosis of cancer, stroke, or cardiovascular disease.
Yesterday was.

In fact, the IOM charged that, despite the central role of chronic disease in most pain, disability, death, and cost, care continues to be designed around the needs of providers and institutions, and most patients with chronic conditions do not receive the care they need. A 17-year lag in implementing new scientific findings results in highly variable care.
Somewhere near where you live, a couple will discover this week that they are infertile and that if they want biological children of their own, they are going to need in vitro fertilization (or IVF). According to treatment protocol, the woman will need to take powerful medicines to ramp up her production of fertilizable eggs. One monthly cycle of this treatment will run around $12,000. But most couples require more than one cycle to achieve their goal of carrying a child to term. In other words, this couple could easily be looking at a bill exceeding $30,000 or $40,000.
Beginning in 2014, millions of Americans will discover that they qualify for subsidies designed to help them purchase their own health insurance. The aid will come in the form of tax credits, and many will be surprised by how generous they are.