Hospital Readmissions, Mortality Incentives Alarmingly Misaligned

Cheryl Clark, 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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