Safety-net hospitals slash readmissions, but changes to penalty formula needed, study says

Safety-net hospitals have been increasingly avoiding penalties by reducing their readmission rates, but more needs to be done to address their struggles, according to new research from Health Affairs.

Medicare's Hospital Readmissions Reduction Program dictates that hospitals be penalized financially if they have readmission rates below the national average, the theory being that this will incentivize them to cut down on those readmissions. Safety-net hospitals, which naturally have high readmission rates because they largely serve low-income patients, have made progress on this front -- to a degree.

In the first three years of the HRRP, safety-net hospitals reduced readmissions for heart attack by 2.86 percent, heart failure by 2.78 percent, and pneumonia by 1.77 percent, the study found. They also reduced the disparity between their readmission rates and those of other hospitals.

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Yet a disproportionate number of patients discharged from safety-net hospitals lack access to resources that are needed at that point, such as social support and primary care. The concern, the authors said, is that this places safety-net hospitals at risk for penalties because of risk factors that are largely out of the hospital's control.

Indeed, while safety-net hospitals at times reduced readmission rates at a greater clip than some other hospitals, they didn't measure up to what had been accomplished by hospitals in the study's matched sample: facilities whose readmission rates were the same as those of safety-net hospitals.

In other words, hospitals with comparable readmission rates did better at cutting down those rates than safety-net hospitals. The authors suggest that this result may reflect the difficulties safety-net hospitals have in dealing with factors that are out of their control, such as patient homelessness or lack of family support.

[Also: 49 states, DC reduce avoidable hospital readmissions]

Policymakers have recommended a number of approaches to support hospitals in the HRRP. One option is formally adjusting the penalty algorithm for patients' socioeconomic status. But the Centers for Medicare and Medicaid Services has argued that incorporating socioeconomic status into its risk-adjustment methodology would, in effect, lower the standard of performance for hospitals serving struggling patients.

In light of this concern, the Medicare Payment Advisory Commission has proposed a refinement that would divide hospitals into deciles based on their share of low-income patients; it would assess penalties based on the comparative performance of hospitals within the same decile. This tweak, the authors said, would avoid evaluating safety-net hospitals on the same basis as hospitals that serve patients with higher socioeconomic status, without altering the risk-adjustment methodology.

[Also: High hospital readmissions not tied to spike in deaths, Johns Hopkins research shows]

The authors suggest that a penalty program may not be the best incentive for improving safety-net hospital performance. Hospitals, they say, face mixed incentives, and so penalties may not be the most effective motivation.

In addition, they said, implementing programs aimed at reducing readmissions come with associated costs, which may be burdensome for safety-net hospitals. These include devoting staff time to analyzing data and processes, and perhaps the acquisition of new technologies.

Twitter: @JELagasse