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Are hospital readmissions penalties actually improving health outcomes?


A decade ago, a study of hospitalizations of Medicare beneficiaries uncovered average readmission rates ranging from 18.4 percent to 27.5 percent, depending on condition. Enter the Medicare Hospital Readmission Reduction Program (HRRP), which penalizes hospitals with relatively high rates of Medicare readmissions.  

Established in the Affordable Care Act (ACA), it provides a financial incentive—or penalty, depending on your perspective—for hospitals to lower readmission rates. In the ensuing years, many have debated the efficacy of the program and the financial burden, in particular, that it poses for safety-net hospitals that treat vulnerable populations.

Now, data analysis by researchers at UCLA and Harvard University suggests that the program does, in fact, reduce readmissions, but among heart failure patients, the reduction in readmission corresponds with an increase in mortality rates. Let’s take a closer look at the challenge of lowering hospital readmissions while improving health outcomes.


Readmissions on the decline

After steadily inching up between 2005 to 2011, readmission rates across all tracked conditions began to decline in advance of the HRRP launch. Since 2012, the national average rates have continued the downward trajectory, with approximately 2-3 percent declines across all conditions. Last year, the Kaiser Family Foundation evaluated the impact of HRRP and several findings:

  • The total of readmissions penalties is rising—from $420 million in 2016 to $528 million in 2017. KFF attributes the higher numbers to the addition of more applicable conditions.
  • 78 percent of Medicare patient admissions will be to hospitals that receive no penalty or a penalty of less than 1 percent of a hospital’s total Medicare inpatient payments.
  • The ongoing decline in readmissions since 2012 suggests that hospitals have implemented relatively-effective intervention programs.

But one of the most concerning findings was that since HRRP was enacted, hospitals with higher shares of low-income patients and major teaching hospitals are more likely to incur penalties.


Questioning the value of HRRP

The need to reduce readmissions has never been in dispute. In the past, approximately one in five Medicare patients experienced a hospital readmission within 30 days, according to data gathered by the Centers for Medicare and Medicaid (CMS).

But the program has been controversial from the start because of the methodology used to determine penalties. Readmission rates vary depending on numerous factors:

  • By hospital
  • By geographic area
  • By type of disease and severity
  • By level of patient engagement
  • By availability and quality of post-discharge care
  • By patient’s sociodemographic status

Two years after implementation of the HRRP, the American Hospital Association (AHA) published a report, “Rethinking the Hospital Readmissions Reduction Program,” noting, “While hospital readmissions are declining, there are serious questions about how the HRRP assesses penalties that affect the fairness and long-term sustainability of the program.” The report went on to highlight two key issues:

  • The lack of risk-adjustment for sociodemographic factors that influence readmissions, but are out of a hospital’s control
  • The inclusion of readmissions unrelated to the original hospitalization in determining penalties

Commenting in the AHA’s report, Steven Lipstein, president and CEO, BJC HealthCare in St. Louis, Missouri said, “Because the penalties fall disproportionately on teaching and safety-net hospitals that care for disadvantaged patients, the Hospital Readmissions Reduction Program diverts money away from these hospitals and has the unintended consequence of worsening disparities between rich and poor.” And now, it appears that for patients with one of the tracked conditions—Heart Failure—the focus on keeping patients out of the hospital may actually be increasing mortality rates.

The UCLA/Harvard study looked at 115,245 Medicare patients at 416 hospitals. While the study found that HRRP resulted in a decrease in readmissions at both 30 days and one year after discharge among heart failure patients, the researchers’ analysis also uncovered a 1.4 percent rise in 30-day mortality rates and a 5 percent rise in 1-year mortality rates since HRRP’s implementation.  

One of the study’s authors and co-chief of the David Geffen School of Medicine at UCLA department of cardiology, Gregg Fonarow, M.D., warns against looking at declining readmission rates without context, noting, “If a patient dies, then that patient cannot be readmitted.”

Co-author Dr. Ankur Gupta, a cardiovascular research fellow at the Brigham and Women’s Hospital, Harvard Medical School, reiterated the danger, saying, “To avoid the penalties, hospitals now have incentives to keep patients out of hospitals longer, possibly even if previously some of these patients would have been readmitted earlier for clinical reasons. Therefore, this policy of reducing readmissions is aimed at reducing utilization for hospitals rather than having a direct focus on improving quality of patient care and outcomes.”


Focus on Better Patient Engagement

Reducing readmissions is a laudable goal—regardless of the HRRP associated financial incentives—so it should not be abandoned, but it is clear that hospitals need to elevate their post-discharge patient engagement programs for all patients to make meaningful progress that results in better health outcomes.

Rather than increasing the burden on healthcare staff for post-discharge follow-up with all patients, hospitals can leverage a digital patient engagement platform like PatientBond to establish 2-way communication with patients, via each patient’s preferred method — interactive voice response, email, or text — to drive compliance with discharge instructions. 

Messages sent via this platform also utilize psychographic segmentation to ensure that communications resonate with each patient based on their beliefs and motivations when it comes to health and wellness. The improved message relevance, easy response mechanisms and consistent cadence of post-discharge communication motivates patients more effectively, delivering more positive health outcomes and freeing up healthcare providers to manage only the exceptions.

Patientbond has been shown to reduce readmissions for Congestive Heart Failure, as well as a form of spinal surgery. The consistent, digital patient engagement outside the walls of the hospital allows clinicians to identify patients at risk for readmission and sustain an ongoing relationship with patients who do not need to return to the hospital.  


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