Hospitals to be Penalized for Poor Performance/Re-admissions

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As a hospital administrator, you should now be aware of two major programs in the new healthcare law scheduled to kick in this month (October 2012). Its goal is to ensure better medical care and to provide added insurance by using Medicare's considerable financial influence in a “carrot and stick” approach.


The carrot will reward hospitals for more efficient and higher quality care; the stick will financially punish those who fail to measure up.


As reported in a recent issue of Politico, the Hospital Value-Based Purchasing Program will pay hospitals based on a performance yardstick of standard clinical quality measures as well as patient surveys of patients. The program will withhold 1 percent of Medicare payments to about 3,000 acute-care hospitals over the next year—roughly $850 million. The money will then be redistributed to the best-performing hospitals. The amount withheld jumps to 2 percent by 2016.


The other major program scheduled to take effect this month targets hospital re-admissions. Here, again up to 1 percent of Medicare payments will be withheld to hospitals with high re-admission rates. The goal of both programs is to replace quantity of care with quality.


“I think we all see these programs as the first steps towards the way the system will be structured in the future and the way incentives will be structured in the future,” said Mindy Steinberg, director of government relations for the Association of Academic Health Centers. “But everyone needs to recognize that this is the first step in a long, complicated process.”


Some question if the “carrots and sticks” are big enough to nudge underperforming hospitals to change. There are obviously mitigating circumstances, such as socioeconomic factors and re-admissions of certain cases that raise red flags. Here, the re-admissions program may unfairly penalize hospitals who need the funds to maintain quality healthcare.


The Miami Herald recently reported that 10 Tarrant County hospitals in Forth Worth—including the Medical Center of Arlington and the Texas Health Harris Methodist Fort Worth—were penalized by Medicare for re-admitting patients too soon after being discharged.


Medicare reimbursements for as many as 2,200 hospitals nationwide are being cut by up to 1 percent for excessive re-admissions. While it may seem like a slap on the wrist—a $30,000 claim will be reduced to $29,700 for errant hospitals—the goal is to spur hospitals to gradually improve. The re-admission problem is significant. Nearly 1 in 5 patients returns to the hospital within a month of being discharged. This costs Medicare a whopping $17.5 billion in additional hospital bills.


Re-admissions most often occur after heart failure, heart attack and pneumonia. While these constitute a small part of Medicare’s annual discharges, they make up a sizable number of re-admissions.


The Center for Medicare and Medicaid Services has already begun withholding reimbursements. The penalty rises to 2 percent in October 2013 and 3 percent in October 2014. Are you ready?


Image courtesy of MorgueFile


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  • Alex Kecskes
    Alex Kecskes
    Thank you, Linda S. and Elshadie for your comments. They will help create a greater awareness of this on-going problem.  
  • linda s
    linda s
    Certainly, ‘fiscal sanctions and/or rewards” may force a few individual organizations to become more “diligent concerning overall ‘standards of care’ and their effectiveness, in regards to services rendered.”  However, “until care givers actually, ‘go back to basics’ as pertains to ‘a mind-set of care and compassion towards servicing our clients’ there will NOT ever, be any significant change!” With this in mind, glad to see the ‘patient surveys’ will have such an integral part (despite, the fact, they too can very ‘easily’ be skewed) AND surely, there will be plenty of back-lash re: ‘re-admission rates’; especially as the article points out as concerns, the medical facilities located in the lower socio-economic areas.  “As they are ‘undeniably’ inside of communities, in which, LIFE in general(not to mention the lack of resources for ‘preventative and/or maintenance care’) is so hard on both one’s mental, as well as physical well-being!-Linda G. Sullivan RN, BSN, C
  • Elshadie B
    Elshadie B
    Thank you for sharing this article. I hope this article is an eye opener for many of us, care providers and facilities. The re-admissions rate among Asthma patients are also high as in the as heart attack and pneumonia. Health care organizations should develop and implement a strong/effective asthma program/pathway in ED, ICU/IMC as well as the general floor. This method does not only mitigate the frustration and unnecessary treatment cost, but it will also keep the frequent flyers away from the hospital. Especially, if the program includes patient and family education during the hospital visit, it will be beneficial to both, the patient and the health care organization. Thank you for your comment!
  • Linda Chaplin
    Linda Chaplin
    This is a good start. Many times, as a nurse I have had to send patients back due to issues like bowel obstruction, infections, continued respiratory issues. Come on!!! If a patient had surgery and they have not had a bowel movement in 4 or 5 days, you discharge them. Shame on the hosdpital who discharged them and shame on my facility who accepted that patient because of the economy issues and trying to keep beds fulled.
  • Alex Kecskes
    Alex Kecskes
    Thank you all for your thoughtful comments. Obviously, there are many factors that need to be considered in implementing these programs. I especially appreciate the comments from healthcare professionals who work with patients every day, and from those of you who have been patients and experienced problems with the current system first hand.  
  • Kay K
    Kay K
    As a nurse who has worked in both acute and long term care, I think this is a potentially good program.  It will force hospitals tp formulate pathways for dealing with these chronic conditions in a timely fashion.  Delay in implementing treatment is responsible for readmissions andmore costly for the Medicare program.
  • Amad N
    Amad N
    Awesome information,Thanks,Amad
  • antoinette c
    antoinette c
    I think hospitals need to be consistent with their quality assurance performances and reviews in all aspects of patient care.
  • Marycarol B
    Marycarol B
    Contributing factors to readmissions can include premature discharges, which are also influenced by medicare guidelines.
  • N. Kevin N
    N. Kevin N
    I do not think that this is a good idea.  Elderly persons are subject to further problems from the same problem as little as two weeks out of the hospital.  The human body is a very complex thing and a problem can arise from the same problem with a different situation.  Two or three of these problems can happen from two or three patients and the hospital will soon drop patients carrying medicare and this can turn into a future life threatening situation.  This stems from this Obamacare crap and hopefully after Nov. 8 we will not have to contend with this because it will be repealed by our new President, Mit Romney, a President with a lot more intelligence than what we have now.
  • Samuel O
    Samuel O
    In as much as quality outcomes have eluded most hospital organizations, withholding badly needed Medicare payments could adversely compromise the much sought after patient quality outcomes. With that said,  there has been adequate data depicting the correlation between financial incentives and quality improvements. Undoubtedly, clinical operational excellence has proved to be a "cost reduce and revenue increaser". Overtime, increases in medicare reimbursement withholding will compel care providers to devise innovative ways to curtail re-admissions and improve outcomes; a  result that rewards providers with financial incentives. A predetermined incentive package should be more than enough reason for hospitals to minimize re-admissions by making quality a priority and devising ways to achieve targeted quality outcomes.
  • Kerry G
    Kerry G
    This is just another federal mechanism to withhold payments and create stress on the system.  Morbidity does not know a reimbursement mechanism, nor does it care.  Hospitals for years now have tried to discharge pateints as soon as practical to conserve cost and hopefully generate some surplus.  The three common illness catagories mentioned are serious problems, and usually costly to treat.  They can stay longer in the hospital and there will be added cost.  Discharge them early and run the risk of them coming back again...because they are sick! The cost will be the same, or they will have difficulty getting readmitted, ( a likely scenario).  So a penalty because these folks are sick, and may not do well regardless of how effectively they are treated, does not really have anything to do with quality.  As a healthcare executive for over 30 years, I have never been a partly to staff or clinicians that didn't do their best for the patient.  This carrot and stick approach is simply punitive.  A better solution would be to add incentives to help care for them with reasonable reimbursement, not punish sick folks and the people trying to take care of them.  Just some thoughts.
  • rita g
    rita g
    On initial review idea sounds great...another method of insuring accountability...while rewarding those hospitals that provide good practice may actually lead to decreased standards as standards for readmission are may be raised and patients who really should be be readmitted are sent home to suffer or die at home.  
  • Lisa B
    Lisa B
    As with any corrective measure there is the relative historical factor that when discipline is applied in the form of dening priviledges (as with a child) the behavior 90% of the time fails to improve. I am afraid that the institutions who are monatarily penalized will feel the weight of trying to do more with less and therefore the program will backfire and instead of improving their standards may in fact cause existing marginal performance to decline ultimately resulting in higher patient death, misdiagnosis and mistreatment. I agree hospitals should be made to maintain a high degree of permance, but we must come up with a more amicable programs. Sometimes reward systems especially in group peformance causes each individual to perform at their highest which eventually raises the level of performance of the group. This may be the way to go instead of witholding funds.
  • rose b
    rose b
    Is this like the 3 strikes and your out? I can see the future in health care has gone to the dogs...  It is about the money, not the human being... sad.
  • Anna L
    Anna L
    I was told in a nurses' meeting by my DON that we as LTC nurses could not send residents back to the hospital within 30 days after discharge because it would cost the local hospital in terms of fines and penalties.  Even if they needed to go back to the hospital due to exacerbation.This is what is going to happen once the law goes into effect. Believe me, I was horrified at what was coming out of her mouth.  I guess they would rather the resident die unnecessarily at the nursing home and save the local hospital money.The law is needed but the problem lies in followup care after leaving the hospital.  Many patients do not realize how sick they really are and attempt activities they should not be doing.  Patients used to stay in the hospital longer but now they are discharged after only a few days.  A lot of them do not keep their followup appointments with their primary care physician.It is these types of situations that contribute to the high rate of re-admission among elderly patients.Could we save on costs if we just kept the patient in the hospital for a week instead of three days after a mild heart attack or a diagnosis of heart failure?  I certainly think so.
  • Debera M
    Debera M
    This will better the medical field,which is over due for a change.
  • Amorcita h
    Amorcita h
    These adissions does not just occur with the medical-surgical patients. It is very prevalent for the behavioral,psychiatric admissions as well. In fact there are more re -admissions in the psychiatric unit and they are also considered . Psych admissions are considered curve out meaning no matter how many re-admit hospitals are still reimbursed. Adult Day Health CAre. if patients are  residing in structured facilities why do they still have to go to adult day health care centers. These board and care and homes provided can assist with activities at their facilities where they reside. I call this double jeopardy in reimbursement using our tax payers money. The middle class is getting fewer and the lower income goes bigger in  due to poor assessment of whoever is concern in the allotment of funds where it could be curtailed and handled better.
  • Susan B
    Susan B
    Isn't insurance/medicare the main reason patients get discharged when they do from the hospital?Don't they usually stop paying after a certain time they deem necessary for pt. to have healed enough to be released?
  • Marla C
    Marla C
    Not really fair.
  • Deloris T
    Deloris T
    As a medical professional and as a caretaker of several terminally ill person over the last 27 years I believe that these measures have a double edged sword. Yes it is a possible incentive for higher quality care. But bear in mind that Medicare mandates the number of days a person can stay in the hospital for a specific illness. Sometimes patients are rushed out of the hospital by medicare not the doctor. Doctor often would like to keep patients a few more days to insure that they are recovering properly but medicare will deny the request for additional days. In these cases the patient would have to cover the cost of the extra days and most are unable to do this so they are sent home only to return to the hospital for a setback days or weeks later. Also in the case of heart failure one of the biggest problems is fluid retention. This is a medical condition where fluid usually accumulated in the lungs and the area around the heart. A person may be fine now and in a matter of hours be critically ill. Unless this fluid is removed it can be fatal. It is almost impossible when or how often fluid buildup will occur. As the heart gets weaker it will occur more frequently making it impossible to control re-admissions. If the goal is to improve quality while avoiding unnecessary procedures and re-admissions there will have to be better guidelines and exception for certain health issues that are beyond medical control for re-admissions. These measures may be a beginning but they are not a solution.
  • christine c
    christine c
    How does the PCP fit into the equation. I have seen readmissions because the PCP is not doing their job and the hospital has to clean up their mess. Then the hospital may not clean up the mess and just send them back to their PCP.The whole thing is sad because some PCP should be referring sooner to specialities  before the need for hospitalization. They are so afraid of losing their patient.
  • Paul K
    Paul K
    What about the overwhelming list of non-compliant, fantasy attention, and drug seeking patients that are constantly being readmitted for the same diagnosis over and over again (frequent flyers) There should be a way or a process of questioning the re- admit.  A penalty to the patient could restrict them and save us all the expense.  It is very frustrating to see and care for these lowlife's knowing our tax dollars are paying for their laziness and bad habits.
  •  Linda Z
    Linda Z
    I think this is terrible. There are many case of people who get discharged that find it necessary to be readmitted.  Sounds like the government would rather have seniors die instead of trying to get well.  No one likes to be hospitalized, much less readmitted.  1 of 5 patients being readmitted isn't bad.
  • Eileen H
    Eileen H
    I am a 65 year old student studying healthcare management.  I am appalled at the fact that hospitals are readmitting these patients so fast.  I would think that they would have better home management care and nursing set up so these patients could be taken care of at home.I was a patient recently at a hospital and had to be admitted again, but to another hospital close by, because I went by emergency medical help.  I went to the first hospital by my own choice, because I liked that hospital better.I am not able to continue my studies because of my physical illness has not been fully under control.  I am not able to sit for three  or four hours in a class room, and I am having trouble remembering my studies right now.  I am seeing a specialist on Wednesday and I hope he can start helping me to know how my lungs can be helped to work better.  I am having trouble breathing sometimes and I am having some problems with my blood pressure.

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