Healthcare Business News
Merrill Goozner, Modern Healthcare editor

Why not a performance standard?

Medicare readmission penalties should be agnostic to underlying conditions

By Merrill Goozner
Posted: January 26, 2013 - 12:01 am ET

New research published last week in a themed issue of the Journal of the American Medical Association calls into question the current structure of Medicare's Hospital Readmissions Reduction Program, which penalizes hospitals if they have excessive 30-day readmission rates. The operative takeaway should be amend, not end.

The lead study found that a large majority of the patients readmitted within 30 days of hospitalization between 2007 and 2009 for heart failure, heart attacks and pneumonia—the three conditions penalized under the CMS program—had been re-hospitalized for a different reason.

A quarter of Medicare-eligible heart failure patients returned within 30 days, but only a third of them had suffered another heart failure incident. A fifth of heart attack victims returned within a month, but only 10% of them presented with another heart attack. And 18% of pneumonia patients were readmitted, but less than a quarter of those were for recurrent pneumonia.

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The report noted that those hospital frequent flyers, who are a major driver of rising Medicare costs, almost always suffer from a number of comorbid conditions that require constant attention. This isn't surprising given the mean age of those readmitted for all three conditions hovered near 80. Add to that the shock and stress of hospitalization—what Yale cardiologist Harlan Krumholz calls “post-hospital syndrome”—and the challenges facing physicians and hospital administrators in reducing readmissions become clearer.

What won't work is taking a silo approach to treating either the conditions that led to the initial hospitalization or these patients themselves. The move toward accountable care organizations that coordinate care from the primary physician to the post-acute-care settings is obviously a start. But as another study in the journal pointed out, engaging a number of providers that touch these patients in community settings—from nursing facilities to area social service agencies—can have a major impact in lowering initial hospitalization rates, which in turn lowers the total number of readmissions.

For nearly a decade, healthcare quality crusaders in the policy world, and eventually the CMS, pushed for pay-for-performance programs that focused largely on hospitals' and physicians' adherence to a number of clinical best practices under the assumption that better performance would lead to better outcomes. But as we saw in a recent Modern Healthcare report, there is a limited connection between successful adherence to quality metrics in the CMS' value-based performance program and better outcomes like readmissions. Apparently, there isn't a fixed playbook for how to achieve success.

The latest group of studies in JAMA suggests the same can be said for reducing readmissions. The goal is the right one. If the total number of readmissions and the readmission rate go down, it shows hospitals are doing something right and Medicare, patients and the taxpayers will save money.

But using a silo approach to penalizing hospitals for specific rates of excess readmissions—the program is set to expand to chronic obstructive pulmonary disease, coronary artery bypass graft surgery and percutaneous coronary interventions in 2015 with potential penalties rising from 1% to 3% of Medicare reimbursement—may not be the right approach.

Medicare should move to a performance-based standard that penalizes or rewards hospitals for their overall readmission rate. Let them figure out how best to achieve that in collaboration with local physicians and the local community.

Merrill Goozner, Editor

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