Q&A: The costly meetup between socioeconomics and hospital readmissions

Amy Kind, M.D.

Questions are looming over whether the $280 million in penalties incurred by hospitals with high patient readmission rates were fairly imposed. More than 2,000 hospitals suffered this fate, losing 2 percent of their federal Medicare reimbursement dollars under the Patient Protection and Affordable Care Act In 2014. The answer could have a lot to do with the socioeconomic makeup of the hospitals’ patients.

[Also: Medicare penalizes 721 hospitals over medical errors]

A new study in the Annals of Internal Medicine indicates that hospitals in disadvantaged neighborhoods incur higher patient readmission rates, making them more likely to be hit with federal penalties. Healthcare Finance asked the study’s lead author, Amy Kind, MD, assistant professor of geriatrics at the University of Wisconsin School of Medicine and Public Health, to elaborate, since if true it could create an unequal playing field for hospitals in urban areas.   

HF: In your study, you indicate that within the most disadvantaged neighborhoods, hospital readmission rates average 27 percent, whereas in the least disadvantaged neighborhoods the average rehospitalization rate is 21 percent. What are the factors behind this disparity?

Kind: The core of the matter is that an interplay exists between socioeconomics and rehospitalization. There has been this ongoing and very passionate debate in the medical literature about how much of a patient rehospitalization event is due to hospital quality as compared to the patient’s socioeconomic milieu. Is it the hospital’s support, resources and abilities to cope with the care challenges of a patient with an acute illness that is the core problem? Or are there other factors?

HF: Your study seems to clearly indicate that other factors need to be considered. Does the federal government, in this case the Centers for Medicare & Medicaid Services, take into account these other factors when imposing penalties under PPACA?

Kind: They do not. The derivation of the metrics upon which the penalties are created is up to the discretion of the Department of Health and Human Services. There are a lot of questions in the medical arena about how the metrics are developed, but the fact remains that no socioeconomic factors are included in their adjustment. Consequently, penalties are imposed without regard for other factors driving rehospitalization, such as a hospital caring for a highly disadvantaged population.

HF: How convincing is the link between readmission rates and a patient’s socioeconomic situation?

Kind: The research suggests that socioeconomic disadvantages play a strong role in rehospitalization. I’m a clinician and I know hospital quality of care matters. If patients are not prepared to take care of themselves because of their socioeconomic conditions, the findings strongly indicate a higher rate of rehospitalization. The bottom line is that ‘residents who live in a disadvantaged neighborhood’ is a predictor of rehospitalization on a magnitude similar to ‘chronic pulmonary distress.’ This should give you an idea of just how strong the association is.

HF: In your research to determine patient socioeconomic status, which data did you draw from and analyze?

Kind: We leveraged U.S. Census data to examine things like the average income in a neighborhood, education levels, employment statistics and factors involving household quality like motor vehicle ownership, plumbing access in rural areas and telephone access. We scored these factors in an index we called the Deprivation Index and used that as our marker. These were compared to rehospitalization rates and Medicare data.

HF: Based on the findings of your study, what is the message to the finance organizations at hospitals located in disadvantaged neighborhoods or serving a largely disadvantaged patient population? What can they do to reduce readmission rates to limit the risk of government penalties?

Kind: Concurrent with the release of the paper, we launched a free online toolkit so any health care system provider can look up the Deprivation Index level of the neighborhood a patient lives in. Once providers have this information, they can start up a conversation with the patient about their situation at home, learn who might live with them to provide support, or determine if there is a relative or friend nearby who can assist their needs. Typically, discharged patients have a health care professional who helps them bridge inpatient and outpatient settings, providing education and support and making sure they can take care of themselves. Based on these deeper conversations, hospitals can then target their care resources in more novel and effective ways.

HF: It would seem that this is also a public policy issue. Penalties are being imposed against hospitals for readmission rates, yet contributing factors are disregarded. Would you agree?

Kind: Any time new information comes to light, we hope it has an effect on public policy. This seems to be the case. Since releasing the paper in December 2014, interest has been expressed by policy leaders inviting us to present our findings in person. They’re curious about our evidence indicating that community-based factors may play a role similar to hospital quality of care in rehospitalization rates. But, additional research needs to be done to understand how this disadvantaged marker continues to play out over time. Until then, we urge hospitals to access our data to inform deeper conversations and better decisions surrounding patient care.