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Hospital Readmissions, Mortality Incentives Alarmingly Misaligned

Cheryl Clark, for HealthLeaders Media, April 26, 2012

Why does the Affordable Care Act impose much stiffer financial penalties on hospitals with higher 30-day readmission rates than for hospitals with higher 30-day mortality? Isn't preventing death, the ultimate bad outcome, much more important to incentivize?

That's the sticky question healthcare leaders are asking, which challenges the priorities and incentives set forth in the ACA. Practically speaking, the formula greatly dilutes the impact of mortality on incentive payments.

"It's like readmissions matter more than mortality, and that just seems ill-advised," says Ashish Jha, MD, a Harvard School of Public Health policy researcher and practicing internist who has been parsing the impact of Medicare's rules on hospital performance.

"I don't know any patient who would say, 'Oh, well, I'll take a higher risk of dying as long as I don't have to be readmitted,' " "It's hard to fathom that now readmissions are more important," he said in an interview.

Readmission penalties
The penalty for having higher rates of risk-adjusted readmissions starts at 1% of a hospital's Medicare DRG rates for heart failure, pneumonia, or acute myocardial infarction patient discharges as of Oct. 1, 2012 and increases to 3% in 2015.

But hospital 30-day mortality, which moves into the formula in FY 2013, is just one of more than 20 quality elements that make up the 1% to 2% of the value-based purchasing incentive payment hospitals with higher mortality will lose.

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2 comments on "Hospital Readmissions, Mortality Incentives Alarmingly Misaligned"


Carl (4/30/2012 at 10:59 AM)
It makes sense from a financial point of view. If the patient dies, their expenses cease. It is the money with which CMS is concerned. I have noted in my research that the hospitals with the lowest mortality rates also have higher readmission rates.

Michael Barber MD (4/26/2012 at 3:26 PM)
There is significant data and experience that would indicate that reducing readmissions is a good way to reduce 30 day mortality plus it is easier to measure and does not require risk adjustment like mortality. The problem that hospitals, even high quality ones like Beth Israel, see readmissions as the only way to reduce mortality instead of increasing the community based resources that can increase adherence to therapy and solve many of the non clinical problems that contribute to both readmissions as well as premature mortality. Studies of "hospital at home" for congestive heart failure show that treatment costs are 20% less and complication rates nearly zero as well as fewer clinical relapses. Other studies show that primary admissions for these disesases can be reduced up to 50% by taking a highly integrated person centered approach to our most vulnerable elders. In my mind, the financial incentives to use inpatient resources to heal our patients have caused hospital leaders to have blinders on the work that can be done at the community level.