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The Johns Hopkins Bloomberg School of Public Health newsfeed yesterday carried a version of a piece from the Wall Street Journal. The article, headlined "Return Patients Vex Hospitals" was written by Laura Landro and appeared on page A6. The article noted that there are new policies being put in place for Medicare to penalize hospitals up to 1% if the rate of readmission for discharged patients is higher than expected.
There are many interesting questions about this from an economic perspective.
First, how is the expected rate defined and could an individuals hospital do anything to "game the system" and push the expected rate upward, making it easier to stay under the rate, without harming patients?
Second, the article comments on how part of the problem may be the transition between the hospital and care in the community. While there is no reason to suspect that those providing care in the community would want to provide anything other than the highest quality care, does this create a need for the hospital to control care in the community better? Does this then lead to an incentive to form an integrated network? And even if the hospital is successful at hospital care will it then be successful at providing care in the community? Presumably the incentives might line up better if the hospital was responsible for care to the conclusion of the episode of care but would that give the organization too much market power and, again, would the management work well.
Third, the article mentions that thirty day readmission rates may not be the right thing to measure. What if a hospital were to lower its readmission rate but then have more patients die in the community? Would an incentive to decrease readmission rates then, perhaps in an unintended way, lead to more deaths.
Public policy to manipulate economic incentives must be ever vigilant for unintended consequences if the target of the policy/incentive change finds a way to respond that was not anticipated.
There are many interesting questions about this from an economic perspective.
First, how is the expected rate defined and could an individuals hospital do anything to "game the system" and push the expected rate upward, making it easier to stay under the rate, without harming patients?
Second, the article comments on how part of the problem may be the transition between the hospital and care in the community. While there is no reason to suspect that those providing care in the community would want to provide anything other than the highest quality care, does this create a need for the hospital to control care in the community better? Does this then lead to an incentive to form an integrated network? And even if the hospital is successful at hospital care will it then be successful at providing care in the community? Presumably the incentives might line up better if the hospital was responsible for care to the conclusion of the episode of care but would that give the organization too much market power and, again, would the management work well.
Third, the article mentions that thirty day readmission rates may not be the right thing to measure. What if a hospital were to lower its readmission rate but then have more patients die in the community? Would an incentive to decrease readmission rates then, perhaps in an unintended way, lead to more deaths.
Public policy to manipulate economic incentives must be ever vigilant for unintended consequences if the target of the policy/incentive change finds a way to respond that was not anticipated.
The article noted that there are new policies being put in place for Medicare to penalize hospitals health magazines up to 1% if the rate of readmission for discharged patients is higher than expected.
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