Efforts paying off?

Medicare officials and policy experts long have thought that hospitals should do a better job of preventing the need for patients to be readmitted soon after their initial discharge.

Initial data now suggest that years of efforts to cut preventable readmissions are finally paying off—though major questions still linger about which specific measures are working and whether hospitals are fixing the statistics without actually solving the quality of care problem.

In the meantime, hospitals' revenue has taken a hit. A Modern Healthcare review of CMS data shows that two-thirds of hospitals have seen payment cuts based on their performance in preventing three types of readmissions—for heart attacks, heart failures and pneumonia. Only one-third of hospitals were unaffected.

The most severe financial penalties in 2012-13 consist of 1% Medicare payment cuts. The penalties will grow in coming years—a situation that alarms some critics because research shows that more cash-strapped hospitals treating populations with high rates of chronic illnesses are being hit the hardest by readmissions penalties.

“Safety net hospitals are much more likely to be penalized,” said Dr. Ashish Jha, a professor of health policy at Harvard School of Public Health.

A comprehensive study of six years of Medicare data, published last week in the online journal Medicare & Medicaid Research Review, concluded that 18.4% of all Medicare inpatients were readmitted for care within 30 days of discharge. That was a decline from the previous average rate of 19%, which was stable over the five preceding years.

The change meant that roughly 70,000 fewer readmission cases were seen in hospital wards in 2012 than would have been predicted by historical rates. The study found wide variation among regions in changes in readmission rates. But the authors wrote that comparing differences in the data was difficult because the data were not adjusted for differences in local disease profiles and demographic factors. Still, larger hospitals in all regions of the country tended to have higher rates of readmissions.

“It's kind of exciting to start to see the results tabulated on what direction we're headed,” said Matthew Press, an assistant professor of public health and medicine at Weill Cornell Medical College in New York. “But closer monitoring and analysis needs to happen to figure out how and why these readmissions were averted.”

CMS Center of Medicare Director Jonathan Blum touted a version of the data in February as “an early sign that our payment and delivery reforms are having an impact.”

Last week's study said it wasn't clear which initiatives were causing the dip in readmissions. Was it the payment cuts that went into effect in 2012? Or was it the rise of the concept of accountable care organizations, which create financial incentives for better coordinated care following hospital discharge? Federal officials also have pushed membership in educational organizations like the Partnership for Patients, while forcing hospitals to publicly report readmission rates to Hospital Compare.

Any of those factors could have had an impact, the study said.

Jha also noted that hospitals have classified a growing number of patients as outpatients under observation—which could skew the readmission numbers downward because they would not be recorded as readmissions if they later were hospitalized.

“Fundamentally, the question to me is: Have we really done a good job of preventing readmissions, or have we just reassigned people who would have been readmitted to a different status?” Jha said. “The jury is still out.”

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