This post is about what I would want my children to know about investing in their first few years out of college. But it applies to anyone starting their career,...
There is one constant in regulations and policies… unintended consequences. Presently, Medicare seeks to improve quality of care delivered in hospitals by rewarding those hospitals that have lower mortality rates and lower 30-day readmissions. On the surface, this sounds like a great idea. But under the surface, are we penalizing hospitals that keep more patients alive?
In fiscal year 2013, Medicare began penalizing hospitals for higher than average 30-day readmission rates for patients with heart failure, myocardial infarction, and pneumonia under the Hospital Readmission Reduction Program. In fiscal year 2014, Medicare began penalizing hospitals for higher than average 30-day mortality rates for patients with these same diagnoses under the Hospital Value-Based Purchasing Program.
Here is the problem. Patients who get readmitted frequently are more likely to die in the near future – they are sicker. Conversely, patients who are sicker and at risk for death but are kept alive by better in-hospital care are more likely to be readmitted – they too are sicker. If Medicare equally penalized excessive readmissions and excessive mortality, then these factors would balance out. However, readmission penalties are 10 times greater than mortality penalties.
A recent study in JAMA Cardiology showed that this discrepancy in Medicare penalties does result in greater penalties for those hospitals that keep sicker patients alive than for those hospitals where equally sick patients die. In other words, Medicare disproportionately penalizes those hospitals that keep their mortality rates down at the cost of having higher readmission rates.
Last year, our hospital had an exceptionally low inpatient mortality rate of 0.54 which puts it at the second lowest mortality rate for all academic hospitals in the United States. We also struggle with a higher than average readmission rate. The implication of this study is that hospitals like ours keep patients alive but they live only to be readmitted another day. The results of the study further suggests that we would have gotten paid more by Medicare if more of our patients died so that they would not live to be readmitted.
The solution is to equalize the Medicare penalties for excessive readmission and for excessive mortality. I think that most patients would prefer to stay alive and be readmitted within 30 days instead of dying and not being readmitted.
November 5, 2016