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Hospital Readmissions, Mortality Incentives Alarmingly Misaligned

 |  By cclark@healthleadersmedia.com  
   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.

Higher quality hospitals should be incentivized to focus on improving safety and other services that look at outcomes like mortality, Jha says. For example, it may be that higher quality care results when hospitals and doctors closely track their patients after they are discharged, and rush to rescue them when they get in trouble.

Jha had his analyst run the numbers on the latest list of "best hospitals" named by U.S.News & World Report, which revealed that most of these hospitals do look lopsided. "What you see is a pattern where the best hospitals tend be very low on mortality rates, but tend to be high in readmissions," he says.

Jha made similar comments to journalists attending the Association of Health Care Journalists conference in Atlanta on Sunday.

I noted that for some hospitals the difference is particularly stark.

On Medicare's current Hospital Compare spreadsheet I found Exhibit A: Beth Israel Deaconess Medical Center in Boston, which is "better than" other U.S. hospitals in 30-day mortality rates for all three measured disease categories—heart attack, pneumonia and heart failure.

But Beth Israel is "worse than" other hospitals in 30-day readmission rates in those same diagnoses, and therefore is ripe for a steep readmission penalty starting Oct. 1.

"And Beth Israel is a terrific hospital," Jha says. "The more you look, you do see the pattern."

In fact, almost no hospital in the country excels in both readmissions and mortality disease categories.

What Jha fears is that some low mortality hospitals will start realigning their resources in favor of programs that avoid readmissions.

Lopsided incentive system "is frustrating"
I asked Ken Sands, MD, Beth Israel's senior vice president for healthcare quality, if he thinks that will happen. The lopsided incentive system "is frustrating," he tells me. "We're proud of the fact we have a low mortality and we want to do everything possible to decrease preventable readmissions. But we certainly don't want to lessen performance on mortality while doing so."

Sands thinks it's too early to say whether other hospitals will shift any of their focus from life-saving measures. But he acknowledges, "it's certainly true that funds are going to be spent to prevent readmissions, and they have to come from somewhere."

They might come from something that targets patient satisfaction scores, or in resources now spent to improve access to care, he cautions.

In a Perspective article "Thirty-Day Readmissions—Truth and Consequences" in the New England Journal of MedicineApril 12, Jha and Harvard colleague Karen Joynt, MD, elaborated on their concern that hospitals would pull resources away from quality improvements that save lives and shift them to programs that avoid readmissions. Among their points:

Only a small portion of readmissions within 30 days are truly preventable. Rather, readmissions depend more on community factors outside the hospital's control, they wrote. One study showed that fewer than 20% of readmissions are preventable.

Safety net hospitals have higher rates of readmission and will be penalized more under the readmission penalty rule. "We know that some of the most important drivers of readmissions are mental illness, poor social support, and poverty, which are often deeply ingrained," Joynt and Jha wrote. Thus, "the current scheme to penalize hospitals with high readmission rates is likely to disproportionately affect institutions that care for poor or minority populations or those with a high burden of mental illness."

Rather than reflecting poor quality of care, a readmission may in fact be a life-saving action, providing "good access to hospital care." Referencing research by Eiran Gorodeski, MD and colleagues at the Cleveland Clinic, published in the New England Journal of Medicine, Joynt and Jha wrote, hospitals with low heart failure mortality rates have higher readmission rates, "presumably because they keep their sickest patients alive, and those patients are subsequently more likely to be readmitted."

Too much emphasis on reducing readmissions may be a misdirection of efforts. When resource-poor hospitals expend so much effort reducing readmissions, "they have probably forgone quality-improvement efforts related to more urgent issues, such as patient safety."

"Many of these deaths are preventable, yet we are focusing tremendous resources on preventing rehospitalizations for three conditions that account for approximately 10% of all hospital admissions in the Medicare population," they wrote. "Even if CMS expands its readmission penalties to include more conditions, the policy will fail to address what patients care about most."

Of course, preventing readmissions is a worthy goal and it will save a ton of money, $7.1 billion over 10 years according to the Congressional Budget Office.

Of course we want to keep patients out of the hospital by managing their care better in the hospital. Readmissions aren't always good for patients, and they cost the Medicare program tons of money. Better to keep them healthy outside.

Misaligned incentives
But Joynt and Jha make an excellent point about the misalignment of incentives under the Affordable Care Act, which the Centers for Medicare & Medicaid Services may not be able to significantly change without an act of Congress. The ACA, for example, requires that measures related to surgeries, patient experience scores, and efficiency of care be factored into the equation, and the amount of the penalty is statutorily set.

However, the Health and Human Services Secretary is allowed to assign the weight for the ingredients in that formula as she "determines appropriate."

I'm not sure why the ACA was cobbled this way. It may be that policymakers aren't sure that hospital mortality can be as fairly risk-adjusted as hospital readmissions. Perhaps it was because of the huge amount of money that avoidable readmissions cost taxpayers.

Many recent columns in this space have focused on improving the readmissions effort, and that of course should remain an important hospital goal. But Jha's and Joynt's point about these misaligned financial penalties, and their potential consequences, asks a thought-provoking question, and provides a critical alert.

See Also:
30-Day Readmissions Rule Under Two-Pronged Attack
Keeping Readmission Rates Low with Treatment Guidelines

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