Demographics and Risk

Brian Klepper

Last week I received a request to comment on data from CMS showing that my home state of Florida’s top safety net hospitals were all in the bottom quartile for hospital re-admissions (meaning they had the highest rates of readmissions). These data are being tracked by CMS and were apparently released in advance of the establishment October 1, 2012 of the Hospital Readmissions Reduction Program under Section 3025 of the Accountable Care Act. Next year, CMS will begin to tie prospective hospital inpatient payments to the dollar value of the hospital’s percentage of preventable Medicare readmissions for three high volume procedures as chosen by the Secretary of HHS with the assistance of the National Quality Forum.”

In general, this is a big step forward and long overdue. Creating financial incentives that make hospitals accountable for preventable re-admissions is one direct path to improving inpatient care quality across the country.

But only if the characteristics of patients for are properly accounted for, not only in terms of severity but also in terms of their capacity for care after discharge. Low income patients often lack the money, help and other resources needed for recovery at home. It is counterproductive for the safety net hospitals that carry the larger burden of caring for these patients to be penalized financially for their patients’ very significant socio-economic challenges.

This is the gist of an important letter to CMS Administrator Donald Berwick from American Hospital Association former President and now Executive Director Rich Umbdenstock.

There are pilot programs ramping up to help safety net facilities better manage the dynamics of inpatient care and discharge that lead to these issues. In the meantime, CMS should incorporate socio-economic status into its risk adjustment calculations,not only to ensure fair treatment of the safety nets, but also to promote better ways of addressing this important and very difficult problem.

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