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Readmission legislation will harm hospitals that care for the poor

Posted Jan 06 2010 8:08am

By Richard Cooper, M.D. - Guest blogger
University of Pennsylvania

It may surprise you to learn that the pending healthcare reform legislation authorizes the Secretary of Health and Human Services to identify “excess hospital readmissions” and penalize hospitals that have more of them. 

Payments for all Medicare discharges would be reduced by up to 3 percent (Senate bill) or 5 percent (House bill), depending on the number that were deemed to result from “excess readmissions.”

There is justifiable concern about readmissions. According to MedPAC, 18 percent of hospitalizations among Medicare beneficiaries resulted in readmission within 30 days, accounting for $15 billion in spending. MedPAC concluded that, simply based on their relationship to an earlier admission, 84 percent were potentially preventable.

The current bills give the Secretary enormous discretion in the choice of methods and measures - no administrative or judicial review would be permitted, although the Senate bill calls for the use of the same methods now used by CMS.

The problem is that CMS finds much greater variation in readmission rates among the nation’s approximately 4,000 hospitals compared to what is found when epidemiologically-sound risk adjustments are made.

Factors that are recognized as affecting readmissions include older age, multiple comorbidities and mental health conditions. But the strongest, yet least frequently measured, is income. More than 20 years ago, Starfield and colleagues found that admissions and readmissions among asthma patients in Maryland were principally associated with poverty. A decade later, Ricketts found the same for all readmissions in North Carolina.

In a careful series of studies, Billings found “an extraordinarily strong association” between admission rates and patients’ ZIP code incomes in New York, Miami and other cities, with rates four times higher in low-income areas than in affluent ones, an observation that we confirmed in Milwaukee.

Income explained more than 80 percent of the variation among ZIP codes. And this is not unique to the US. Across Canada, hospitalization rates for treatable conditions were twice as high in low-income neighborhoods. Poverty matters.

No! Stop that blather. We have to find ways to pay for healthcare reform and to rein in all of those greedy hospitals and specialists who are causing America’s healthcare costs to soar. It’s ok to penalize the providers who care for the poor. More of their patients will be insured anyway…….But wait. If poverty is the central problem, maybe we could focus on that, and if we did, maybe we could produce better health and a more affordable healthcare system. Now that would really be reform.

Richard Cooper, M.D., is a Professor of Medicine and Senior Fellow in the Leonard Davis Institute of Health Economics at the University of Pennsylvania

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Please share your comments below. Do you agree that poverty is a problem impacting healthcare?

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