In 2012, Medicare began using a new tactic to get hospitals to reduce costly, unnecessary readmissions: It fined them. The Hospital Readmissions Reduction Program, established in the 2010 Affordable Care Act, allows the CMS to withhold inpatient prospective payments to short-term acute hospitals with excessive readmissions for certain conditions.
Since then, debate has ensued over whether the program is effective at improving hospitals' quality of care. Opponents cite concerns about unintended consequences and unfair penalties for institutions that serve sicker patients, while the government maintains that its efforts have born fruit.
A new study, published Monday in the Annals of Internal Medicine, concluded that hospital readmissions across the U.S. indeed declined starting with the ACA, and that moreover, hospitals with the highest readmission rates before 2010 improved the most in the years following.
“There's been a gradual, a progressive, graded attention devoted to the issue of readmissions,” said Dr. Robert W. Yeh, an author of the study and an interventional cardiologist at the Beth Israel Deaconess Medical Center in Boston. Although it would not be possible to “disentangle what the various forces are” -- financial penalties, public reporting, extra attention to readmissions -- and their specific contributions to reduced readmissions, the study showed that “financially incentivizing reduced readmissions leads to reduced readmissions,” Yeh said.
“Our main findings suggest that passage of the law was followed by widespread reductions in readmission rates, even with control for pre-law trends, and that this effect was most concentrated among the lowest-performing hospitals,” the authors concluded in the study.
The researchers looked at the records of more than 15 million fee-for-service Medicare patients discharged from 2,868 acute-care hospitals for heart attacks, congestive heart failure or pneumonia from 2000 to 2013. They calculated risk-standardized readmission rates, and categorized hospitals into four categories of performance: highest, average, low and lowest.
Although overall readmissions fell after 2010 -- the "post-law period," the researchers called it -- lower performing groups made greater gains. Risk-standardized readmissions fell by 69 and 74.5 per 10,000 discharges annually among the highest and average-performing groups. Among the low and lowest performing groups, they dropped by 83.2 and 92.4 per 10,000 discharges, respectively.
“It has a dosed response,” Yeh said of the penalties' effect. “In other words, those hospitals that were financially penalized the most, improved the most.”
Although readmissions penalties did not kick in until October 2012, the researchers counted the first quarter of 2010, when President Barack Obama signed the ACA, as the intervention. The fact that hospitals became aware of looming penalties in 2010 and began redesigning care in anticipation of them justified that decision, the authors wrote in the study.
These findings come on the heels of an allowance granted to safety net hospitals in a section of the 21st Century Cures Act, signed into law in mid-December, which adjusts the risk of hospital readmissions penalties based on patient mix. Now, when fines are calculated, hospitals that treat higher proportions of poorer, sicker patients will be compared to like institutions, rather than against those that treat healthier, well-to-do patients.
Stephen Soumerai, who teaches population medicine at Harvard Medical School and was not involved in and had not seen the study, cautioned against extrapolating from it that health outcomes had improved as a result of reduced readmissions. Hospital readmissions have always been considered a multi-factorial problem, one that financial penalties alone cannot address, he said.
“No matter what the study says, if readmissions is the outcome, and not health ... I'm still worried about those kinds of policies,” Soumerai said. “The big question is, how many of the readmissions are preventable through better medical care? Are you going to blame all of the vulnerabilities of patients on doctors and medical systems?”