Are hospital readmission penalties a good idea?

According to a report in StatNews, the Medicare Hospital Readmission Reduction Program has achieved its primary goal: It has reduced readmissions. A wide body of evidence shows that readmissions began to fall in 2012, when financial penalties took full effect. They have since declined several percentage points in each of the three conditions originally included in the program, according to a Kaiser Family Foundation analysis of Medicare data.

But skeptics say those results might reveal a darker truth — that hospitals are taking shortcuts, and in some cases compromising patient care, to avoid financial pain and public embarrassment.

One recent report by the University of Michigan found that a large percentage of the reduction in readmissions is attributable to changes in the way hospitals are describing their patients in claims data. By describing them as sicker, hospitals can increase their risk adjustments, thus reducing financial penalties.

The biggest challenge emerged last month when researchers at UCLA and Harvard published a study that correlated the reduction in readmissions with an increase in 30-day and one-year mortality rates. 

The study suggested that the program was backfiring for patients, keeping them out of the hospital but thereby jeopardizing their health. And the result was more deaths. “If further confirmed,” the report concluded, “these findings may require reconsideration of the [readmissions program]” in heart failure.