Is Obamacare Punishing Hospitals The Wrong Way?

An elderly homeless man is admitted to the emergency room complaining of a fever and cough. Doctors take an X-ray and diagnose him with pneumonia. They keep him in the hospital for three days while he takes antibiotics and recovers. Then they discharge him, telling him to continue taking the antibiotics for another week. He takes only half his pills and the disease returns, so he checks back into the hospital. Who’s to blame?

According to the federal government, the hospital is. Under the Affordable Care Act, hospitals are fined up to 3 percent of their Medicare payments if too many Medicare patients return to the hospital within 30 days of discharge. By giving hospitals a financial incentive to reduce readmissions, the idea is to encourage better quality care.

It’s turned out to be a rather large incentive. In 2015, 2,592 hospitals around the country — more than half of those in operation — were hit with readmissions penalties, which totaled $420 million.

Yet a study published this week in JAMA Internal Medicine suggests that many readmissions are unavoidable, especially those involving patients like our hypothetical homeless man with pneumonia. The authors of the paper, who are all affiliated with Harvard Medical School, examined 29 patient characteristics — including race, education, disability, alcohol intake and prescription drug benefits — to see whether they had an impact on readmissions.

And — surprise, surprise — they did. The study found that these 29 factors account for nearly half the difference between the readmissions rates at the best- and the worst-performing hospitals.

Medicare officials already make some effort to account for the differences in hospitals’ patient populations. In computing the expected readmissions rate for any given hospital, they factor in a handful of patient characteristics, including age, sex and conditions —> Read More