Debating hospital readmissions penalties and ‘pay for performance’

A federal policy that penalizes hospitals where patients are more often rehospitalized within 30 days of being discharged unfairly targets hospitals that care for the greatest numbers of poor patients, say two Harvard School of Public Health (HSPH) researchers. In a study in the January 23-30 issue of the Journal of the American Medical Association (JAMA), [[Ashish Jha]], C. Boyden Gray Professor of Health Policy and Management, and [[Karen Joynt]], instructor in the Department of Health Policy and Management, examined penalties assessed against 2,189 hospitals and found that 40% of large hospitals and 44% of major teaching hospitals received the highest penalties, compared with 28% of small hospitals and 33% of nonteaching hospitals. Forty-four percent of safety net hospitals—which provide a significant amount of care to low-income, uninsured, and vulnerable populations, often in urban areas—were highly penalized, versus 30 percent of those without such a designation.

The problem with readmissions penalties, established under the Affordable Care Act (ACA), is that they don’t take into account the fact that large hospitals and teaching hospitals often care for the sickest patients, the poorest patients, and for many patients who lack adequate support systems, Joynt said in a January 28, 2013 Boston Globe article.

In the same issue of JAMA, Jha authored a viewpoint article about ‘pay for performance’ (P4P), another ACA initiative, in which hospitals that tie their doctors’ pay to certain quality outcomes are eligible for federal rewards. “P4P, at least as currently conceived, is not working,” Jha wrote. In a January 27, 2013 New York Times op-ed piece on the problems with P4P, Times columnist Bill Keller cited some of Jha’s suggestions to improve P4P outcomes, such as boosting hospital incentive payments (they’re typically small), simplifying incentive formulas, and measuring only key performance indicators such as mortality rates, infection rates, and recurrence of heart attacks.

Jha also wrote about “Getting Pay-for-Performance Right” in a February 4, 2013 entry on his blog, An Ounce of Evidence: Health Policy.

Read the Boston Globe article

Read the New York Times op-ed

Learn more

Federal payment changes may harm hospitals serving poor (HSPH news)

No improvement in patient outcomes seen in hospitals with pay-for-performance programs (HSPH release)