Study Finds Financial Incentives To Reduce Readmissions Associated with Higher Mortality

Could there be a better way to improve the quality of care?

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Physicians and hospitals always want their patients to have the best care possible. No physician or hospital administrator — unless something is wrong with them — wants their patients to be harmed or get substandard care. That said, as far as the Government is concerned, this is not enough. Starting in 2012, the Centers for Medicare and Medicaid Services (CMS) began implementation of the Hospital Readmissions Reduction Program (HRRP), under the Affordable Care Act, aka Obamacare.

The intent of this program was to incentivize good care and penalize bad care, as measured by readmission to the hospital within 30 days of discharge for any Medicare beneficiary who was admitted with heart failure, acute MI (heart attack), and pneumonia. Those hospitals with a higher readmission rate got a financial penalty, and those hospitals with a lower readmission rate got a financial bonus.

The intent was good and noble: we should be focusing on providing the best care for our patients, and those hospitals that do a good job should be rewarded, and those that do a poor job should get penalized. Yet, could the program have done more harm than good? A new study, published on Christmas Day in the Journal of the American Medical Association (JAMA), suggests just that.

The authors analyzed claims data for Medicare fee-for-service patients between April 1, 2005 and March 31, 2015. The HRRP was implemented in 2012. Here was the study population:

There were 8 326 688 Medicare fee-for-service hospitalizations for heart failure, acute myocardial infarction, and pneumonia from April 1, 2005, to March 31, 2015, among which 7 948 937 patients were alive at hospital discharge.

The mean (SD) age of the study population was 79.6 (8.7) years, 4 246 454 participants (53.4%) were women, 6 802 296 (85.6%) were white, and 738 198 (9.3%) were black.

There were 3.2 million hospitalizations for heart failure, 1.8 million for acute myocardial infarction, and 3.0 million for pneumonia and, overall, there were 270 517 deaths from heart failure, 128 088 deaths from acute myocardial infarction, and 246 154 deaths from pneumonia within 30 days of discharge.

The results showed an increase in 30-day mortality after discharge among patients admitted heart failure and pneumonia, but not heart attack. While the death rate for heart failure was increasing before the HRRP started, the increase in mortality accelerated after the program began:

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The study authors speculated possible reasons for these findings:

Most concerning, however, is the possibility that the relationship between the HRRP and postdischarge mortality for heart failure and pneumonia is causal, indicating that the HRRP led to changes in quality of care that adversely affected patients. Financial incentives aimed at reducing readmissions were up to 10- to 15-fold greater under the HRRP than incentives to improve mortality through pay-for-performance programs, and some hospitals may have focused more resources and efforts on reducing or avoiding readmissions than on prioritizing survival.


Safety net hospitals and hospitals serving a high proportion of socioeconomically disadvantaged patients were more likely to receive financial penalties under the HRRP, potentially impeding their ability to invest limited resources toward quality improvement efforts to better outcomes. In addition, the HRRP may have pushed some physicians and institutions to increasingly treat patients who would have benefited from inpatient care in emergency departments or observation units, which could be consistent with the finding that increases in postdischarge mortality for heart failure and pneumonia were entirely driven by patients who were not readmitted within 30 days of discharge. This is also in line with analyses that have shown that following the HRRP, inpatient readmissions declined while emergency department and observation unit stays increased among patients returning to a hospital within 30 days for target conditions.

Could the findings of this study be a clarion call for us in healthcare to think of other ways to encourage the best quality care? True, few motivators are more powerful than a loss of income; it is frequently how employers and health systems can get their employed physicians to comply with rules, such as attending staff meetings and hospital committees. Many physicians have bonuses that are tied to the quality of their work and patient satisfaction scores, and not just how many patients they can see in a shift.

The authors concluded their study by calling for more research into this issue, and I wholeheartedly agree with this call. We need to understand whether this finding is a true trend or just an anomaly, as other studies have not found an increase in mortality after implementation of HRRP. Also, why was this finding only in patients with heart failure and pneumonia, but not heart attacks? The study delves into trying to explain this interesting finding, and more studies may help shed more light.

Nevertheless, this concerning finding of an increase in mortality after the HRRP was implemented should give CMS and policymakers pause. As the study said, safety net hospitals — which are vital to their communities — and hospitals that serve a greater proportion of socioeconomically disadvantaged patients — who may be sicker and therefore get readmitted to the hospital more often — were more likely to receive such financial penalties for increased readmission.

To such hospitals, this loss of income may prevent the hospital from providing transportation for their patients to their doctors’ appointments, or even start a post discharge clinic, which could likely reduce readmission to those hospitals. It could force the hospital to make changes that would make things worse for patients, and I am sure this is not what CMS intended when HRRP was first announced and then implemented.

Readmissions to the hospital are detrimental to patients, and having been admitted to a hospital myself, the last thing I want to do is to go back to the hospital if I didn’t have to. The intention was good: to encourage good, quality care at American hospitals, and there are very many hospitals that do just that and have been rewarded under the HRRP. Still, if more patients with heart failure and pneumonia are dying as a result of the program — which is what the JAMA study suggested — are we really doing the right thing for our patients?

The opinions expressed in this post are my own and do not reflect those of my employer or the organizations with which I am affiliated.

NY Times featured Pulmonary and Critical Care Specialist | Physician Leader | Author and Blogger | His latest book is “Code Blue,” a medical thriller.

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