Reassessing hospital readmission penalties

Abstract

Will Obamacare’s reductions in hospital readmissions improve the quality of care?

The Patient Protection and Affordable Care Act of 2010 is midway through its four year implementation period. The centerpiece of the law is the requirement for near universal healthcare insurance coverage. It becomes effective in 2014.

So much for the patient protection part of “Obamacare.” What about the affordable care aspect: cutting the hugely expensive costs in the US healthcare system? The act has always been weaker in that regard, but it does have some cost cutting measures. One that has already raised a ruckus is section 3025, the Hospital Readmissions Reduction Program.

Under this program the Centers for Medicare and Medicaid Services (CMS) began reducing payments to hospitals with excess readmissions of patients with certain conditions in October last year. CMS began with three sentinel conditions—heart failure, myocardial infarction, and pneumonia—and is penalizing hospitals whose 30 day rates of readmission of patients with these diagnoses are higher than would be expected from each hospital’s case mix. In the first year of the program 2000 hospitals will lose about $300m (£194m; …