Mixed reactions on readmissions reduction program

The New York Times published an article underscoring how difficult it can be to use financial incentives to craft the right policies in light of inadequate or disputed measurements. Medicare had been seeing a number of its patients return to the hospital after a visit to the hospital. The readmissions were costly, and Medicare tried to reduce costs by imposing a financial penalty on those hospitals whose treatments resulted in above-average readmissions. The idea is that with a strong enough incentive, hospitals would find innovative ways of ensuring that patients would not unnecessarily require another hospitalization soon, whether through better discharge instructions or pro-actively communicating with primary care physicians or through other means. On paper, the readmissions rate did decrease; the article points out, however, that people dispute whether the readmissions rate decreased for the right reasons.

Some studies suggest that the readmissions rate might have decreased simply because more patients have died while not being re-admitted to the hospital. Others point to a change in billing practices. For example, others have noted that hospitals will often place patients under observational status, rather than formally admitting them (which would count against the hospital). Patients might understand the difference, but the change in coding could affect the benefits that they are eligible for. Supporters of the program point to their own research suggesting that the program has so far been successful.