Reducing Readmissions: Are Quality Payments a Carrot or Stick?

Janice Simmons, January 28, 2010

A decade ago, not much attention was paid to patients who had to be readmitted to hospitals shortly after their discharges. Wasn't that just the normal way of providing care? However, proposals included in the current healthcare reform measures in Congress that call for cutting back on Medicare payments for readmissions tells us that times have changed.

Payments for discharges paid by Medicare could be reduced by up to 3% in the Senate bill or 5% in the House bill. Could these proposed reductions in payments for unplanned readmissions be seen as a carrot or a stick for the healthcare industry? The answers are not simple and require us to look beyond the hospital walls—and at the needs of the patients within our communities once they are discharged.

Nearly 20% of Medicare fee for service patients were readmitted within 30 days of discharge in 2004, according to a study that appeared last spring in the New England Journal of Medicine. The cost of these readmissions to Medicare: $17.4 billion. But the study brought up the point that this was no time for finger-pointing. It is time for cooperation—both inside and outside the hospitals.

The lead author of the study, Stephen Jencks, MD, formerly head of the Centers for Medicare and Medicaid's Office of Clinical Standards & Quality, says that the issue of reducing rehospitalizations initially brought up fears that the policies might be handled in clinically insensitive ways and "create a lot of problems for standard good practices."

This created a challenge for hospitals and providers of how to address readmissions, says Jencks, who is now a preventive medicine specialist in Baltimore. "People need to figure out how to do it right. This doesn't require a huge amount of research, but it does require clinicians sitting down and saying: 'OK, we can do this."

Recent examples have emerged on how to better discharge patients so they don't require readmission within 30 days. For instance, Boston Medical Center has introduced the Re-engineered Discharge that outlines 11 steps to follow before a patient is discharge. The Society of Hospital Medicine has unveiled the "BOOST" (Better Outcomes for Older Adults through Safe Transitions) program that hospitalists could use to improve the discharge transition process, and enhance the flow of information between inpatient and outpatient providers.

Another anxiety is that providers are being asked to see the healthcare business in a different way. "The system is to a very large extent built around the convenience of practitioners and providers,” says Jencks. “The notion that it's simply OK for a patient to go out the door without a [clinical] appointment or follow-up is a challenge to the way things were working."

Janice Simmons Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at
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