Readmissions Penalties Work. Here's Proof.

John Commins, January 3, 2017

Hospitals with the highest incidences of readmissions (low performers) saw the highest reductions in readmissions when the financial penalties started kicking in.

Robert W. Yeh, MD
Robert W. Yeh, MD

A new study suggests that financial penalties provide an effective incentive to reduce avoidable readmissions, particularly at low-performing hospitals.

Researchers at Harvard and Beth Israel Deaconess Medical Center in Boston examined Medicare fee-for-service hospitalization data from more than 2,800 hospitals across the country between 2000 and 2013.

Based on 30-day readmission rates after initial hospitalization for acute myocardial infarction, congestive heart failure or pneumonia, researchers found that hospitals with the highest incidences of readmissions also saw the highest reductions in readmissions when the financial penalties started kicking in.

Study co-senior author Robert W. Yeh, MD, director of the Smith Center for Outcomes Research in Cardiology at BIDMC and associate professor of Medicine at Harvard Medical School, spoke with HealthLeaders Media about the study. The following is a lightly edited transcript.

HLM: What did your study find?

Yeh: Our initial goal was to examine whether or not the implementation of the HRRP [Medicare Hospital Readmissions Reduction Program] was followed by subsequent declines in readmission rates. We did confirm that.

It did look like there was an inflection point right about at the time of the passage of the ACA that looked like readmissions rates started to take a downturn.

Our second question was about whether some of these hospitals are penalized more than others. The way that the legislation probably was designed, you would hope to see that the hospitals that were penalized the most were the ones that had the worst readmissions rates and were the most highly incentivized to improve and hopefully the ones that improved the most.

That is what we observed. We observed that when we separated hospitals into four penalty groups, maximum, high, low and none, the hospitals that received the highest penalties did have the most rapid decline in their 30-day readmissions for those penalized conditions.

HLM: So, "skin in the game" works?

Yeh: I think so. It's a quite clear example that when hospitals are reimbursed, not just for how much they do but how well they do it, it makes an impact on their behavior.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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