Reducing Readmissions: Are Quality Payments a Carrot or Stick?

Janice Simmons, for HealthLeaders Media , January 28, 2010

On another note, reducing payments for avoidable rehospitalizations may not bode well for those hospitals that see many poor patients, says Richard "Buz" Cooper, MD, a professor of medicine and senior fellow in the Leonard Davis Institute of Health Economics at the University of Pennsylvania, Philadelphia. He notes that recent studies have indicated that 25% to 35% of expenditures of this "excess utilization" is related to individuals who are at two times the poverty level or below.

The idea of reducing payments for rehospitalizations is "related to the notion that everybody should have the same readmission rates and that any higher readmission rate are all due to inefficiencies or other aspects of how providers try to fill beds," he says. But this is not necessarily true, he argues.

It's not a matter of whether one has insurance coverage, Cooper says, but understanding how this population may be accessing care multiple times in an untimely and inefficient way—which may contribute to higher costs to hospitals in the long run. With the rates of readmissions initially higher for poorer population groups, hospitals treating them will be penalized even when they try to bring these readmissions down from a high level, Cooper says.

One of the problems is the support and social structures for these patients once they leave. For instance, many do not have family support at home, may not understand directions because of language barriers, or will fail to obtain needed prescriptions. "Even if they do obtain prescriptions, they may take them wrong or miss appointments," he says. As a result, the patients—many with multiple chronic conditions—may be back in the hospital, again, continuing the cycle.

So are reductions in avoidable rehospitalizations a carrot or stick? Maybe instead it's time to see readmissions as a wake-up call and as the beginning of a new dialogue for hospitals—and for the communities they serve—to listen to and address the needs of patients the serve.

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Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at

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