Crazy ranting about impending socialism/fascism aside, there are legitimate critiques to be made of Obamacare. One policy in particular that raises my ire is penalizing hospitals over performance metrics and penalizing readmissions in particular. The way it works is, patients are admitted to the hospital, treated, and eventually discharged, but a indicator of failure of adequate care is if that patient then bounces back, and is readmitted shortly after their hospitalization:
Under the new federal regulations, hospitals face hefty penalties for readmitting patients they have already treated, on the theory that many readmissions result from poor follow-up care.
It makes for cheaper and better care in the long run, the thinking goes, to help patients stay healthy than to be forced to readmit them for another costly hospital stay.
So hospitals call patients within 48 hours of discharge to find out how they are feeling. They arrange patients’ follow-up appointments with doctors even before a patient leaves. And they have redoubled their efforts to make sure patients understand what medicines to take at home.
Seems reasonable, right? These are things that are part of good medical care; good follow up, clarity with prescriptions, etc. It should be the responsibility of hospitals to get patients plugged into the safety net, assign social workers, and make sure patients won’t fail because they lack resources at home. However, the problem arises when the ideal of punishing readmissions as “failures” crashes into the reality of the general failure of our social safety net:
But hospitals have also taken on responsibilities far outside the medical realm: they are helping patients arrange transportation for follow-up doctor visits, get safe housing or even find a hot meal, all in an effort to keep them healthy.
“There’s a huge opportunity to reduce the cost of medical care by addressing these other things, the social aspects,” said Dr. Samuel Skootsky, chief medical officer of the U.C.L.A. Faculty Practice Group and Medical Group.
Medicare, which monitors hospitals’ compliance with the new rules, says nearly two-thirds of hospitals receiving traditional Medicare payments are expected to pay penalties totaling about $300 million in 2013 because too many of their patients were readmitted within 30 days of discharge. Last month, the agency reported that readmissions had dropped to 17.8 percent by late last year from about 19 percent in 2011.
But increasingly, health policy experts and hospital executives say the penalties, which went into effect in October, unfairly target hospitals that treat the sickest patients or the patients facing the greatest socioeconomic challenges. They say a hospital’s readmission rate is not a clear measure of the quality of care it provides, noting that hospitals with higher mortality rates may also have fewer returning patients.
“Dead patients can’t be readmitted,” Dr. Henderson said.
This is a problem with the careless application of rewards and penalties tied to medical outcomes. While I think it’s a healthy response that hospitals are taking on more of the social work that formerly would have been the arena of government programs, there is another defense mechanism used when government creates perverse incentives in health care. When you create payment incentives for good outcomes, you run the risk of patient selection, discrimination, and fraud. My favorite paper on this topic comes from the British NHS, and their attempt to reward physicians based on better clinical outcomes. My advice with this paper (and with most papers frankly) is to ignore what the authors say about their data (and the amazing success of their program!) and just look at the data for yourself. What they found with rewarding physicians based on health metrics was that doctors that treated the young, healthy, and rich did well, those with more patients, poorer patients, and older patients did more poorly. Finally, physicians that filed lots of “exception reports” to eliminate all their poorly-performing patients did great (yay, fraud!).
Metrics are good for identifying problems, but the mistake is the assumption that poor performance at a metric has everything to do with the physicians or the hospitals, or that slapping a penalty on poor performance will fix the problem. Sometimes, you’re studying society, not medical care. Incentive structures that put the burden on hospitals to take care of the most basic needs of their patients are going to penalize those hospitals that take care of the neediest, sickest, oldest patients, and reward those who treat insured, wealthy, younger, and fewer patients. Worse, if you penalize hospitals for taking care of difficult patient populations, I can predict the outcome. More bogus (and occasionally dangerous) transfers, more patients dumped on public and university hospitals, and all the other tricks of patient selection private hospitals can engage in to avoid getting stuck with the economic losses. That is, patients who are really sick, really poor, really old, and most in need of care will get transferred, obstructed, and dumped. Hospitals that are referral centers, major university and public hospitals that can’t refuse or transfer problem patients, will end up with the disproportionate amount of the penalties because they are often the healthcare providers of last resort. Not surprisingly, the early data already shows this is happening:
The second important development was the release of data on who will be penalized: two thirds of eligible U.S. hospitals were found to have readmission rates higher than the CMS models predicted, and each of these hospitals will receive a penalty. The number of hospitals penalized is much higher than most observers would have anticipated on the basis of CMS’s previous public reports, which identified less than 5% of hospitals as outliers. In addition, there is now convincing evidence that safety-net institutions (see graphsProportion of Hospitals Facing No Readmissions Penalty (Panel A) and Median Amount of Penalty (Panel B), According to the Proportion of Hospital’s Patients Who Receive Supplemental Security Income.), as well large teaching hospitals, which provide a substantial proportion of the care for patients with complex medical problems, are far more likely to be penalized under the HRRP.3 Left unchecked, the HRRP has the potential to exacerbate disparities in care and create disincentives to providing care for patients who are particularly ill or who have complex health needs, particularly if the penalties are larger than hospitals’ margins for caring for these patients.
It would be unfortunate if in the course of creating incentives for better care, we fall into the same old trap of punishing those who take care of the neediest. What we need instead is to acknowledge one major source of bad outcomes is a broken social-safety net. We can’t just keep creating these unfunded mandates that put all the onus of taking care of the uninsured, the poor and elderly on hospitals, and punish the centers that already carry the largest social burdens with responsibility for the failure of our nation to take care of its own. Unfortunately, our answer to problems like these is always to create one more shell game that hides the real, unavoidable costs of taking care of people by shifting it around. This will just result in higher bills on the insured, more crazy chargemaster fees, overburdened public and university hospitals, and ultimately, a system of regressive taxation.