Thursday, October 04, 2012

Seeing through the veneer

I have mixed feelings about ambivalence.  On the one hand, as an economist, I believe in the power of pricing signals to influence behavior.  On the other hand, as an economist, I know that a misplaced pricing signal will either not influence behavior or will have unintended consequences.

But I am not ambivalent about one thing:  The CMS policy on readmission penalties falls clearly into the "other hand" category.  The program is wrong-headed in intent, flawed in design, and will have unintended consequences.

The Premier Safety Institute puts it nicely (sorry, an email newsletter with no link):

CMS has forged ahead despite concerns raised by the Premier healthcare alliance and other hospital groups about the potential for some safety net hospitals, those treating disproportionately large numbers of low income patients, to face penalties that they can least afford. There are also concerns about a lack of consideration in the penalties for planned or unrelated readmissions. Questions also continue about the methodology for measurement and lack of adjustment for socio-economic status.

But even the respected Kaiser Health News falls for the trap in its summary:

More than 2,000 hospitals — including some nationally recognized ones — will be penalized by the government starting in October because many of their patients are readmitted soon after discharge, new records show. Together, these hospitals will forfeit about $280 million in Medicare funds over the next year as the government begins a wide-ranging push to start paying health care providers based on the quality of care they provide.

It should read, "as the government begins a wide-ranging push to save money by penalizing health care providers based on a poorly conceived premise and poorly designed methodology."

Dear hospital folks, expect more of these kinds of metrics and penalties.  The folks in DC are primarily looking for money.  They are adopting administrative approaches to find it and have disguised their financial mechanisms with a veneer of concern for quality.


Anonymous said...

I completely disagree with your last paragraph, whether or not the rest of the post has merit.

nonlocal MD

Tom said...

Amen to your point, Paul.

Jim said...

I am ambivalent about your post. I actually think that the intent is to improve the value of health care - not just quality. So, cost as a a target is justified. It is much easier to directly affect cost through these incentives/penalties than quality - pay less for what CMS defines as substandard. I do worry about safety net hospitals - however, places like Denver Health show us that excellent care does not require excellent payer mix. I think the effect on quality from VBP will be indirect. It creates a reason for hospitals and health systems to allocate resources to quality departments so well-meaning people can work to improve care. We in healthcare should have been doing this all along - but weren't. Regarding readmissions - I'm not convinced you can affect this a great deal (and most data suggests a minority of readmissions are avoidable and SES and location are the biggest drivers of your rate). However, in our work, we have found holes in the care we provide at the time of discharge that we should have fixed a long time ago. It took readmissions penalties to get our attention. Patients may still get readmitted at the same rate- but I believe we will still provide them better care as a result of this work.

Anonymous said...

I am an internal medicine/hospitalist doc. There is an interesting disconnect between these CMS readmission penalties and the electronic record meaningful use process. Hospital readmission end results will be penalized, when many, many factors leading to those results are out of the control of the hospital. in contrast, Initial efforts to *start* an electronic medical record are rewarded, and the threshold is fairly low. I suspect very few places that install a little bit of EMR fail to go on and expand its use system-wide. I wonder if rewarding "meaningful improvement" of hospital discharges would encourage better results.