When it comes to reducing hospital readmissions, financial penalties work

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(Illustration by Michael S. Helfenbein)

Hospitals that were financially penalized for too many readmissions were more likely than non-penalized institutions to subsequently reduce readmissions for all conditions, according to a new study by Yale School of Medicine researchers and colleagues in the Journal of the American Medical Association.

Reducing readmissions has become a national priority. The Hospital Readmission Reduction Program (HRRP) was enacted as part of the Patient Protection and Affordable Care Act and imposed financial penalties beginning in Oct. 2012 for hospitals with higher-than-expected readmissions for three conditions: acute myocardial infarction (AMI; heart attack), congestive heart failure, and pneumonia among fee-for-service Medicare beneficiaries.

Since the program began, thousands of hospitals have been subjected to nearly $1 billion in penalties for not reducing readmissions. To determine whether these penalties resulted in fewer readmissions for the three target conditions, as well as for all conditions, Dr. Nihar R. Desai, assistant professor of medicine at Yale School of Medicine and colleagues looked at Medicare data from 2008 and 2015.

“We found that hospitals that were not subject to penalties under HRRP also reduced readmissions across all conditions, but the hospitals that were penalized under HRRP had more significant reductions in readmissions across all conditions, and even larger reductions for the target conditions that were the basis of the penalty,” said Desai.

Desai said that hospitals seem to have responded to these external policy initiatives, indicating that they indeed work, but he noted that readmission reductions have plateaued since the initial push.

“We know that not all readmissions are preventable, but we are also looking for ways to improve readmission numbers even further,” said Desai. “We’re exploring whether additional reductions in readmissions are attainable and feasible and what kind of policy environment would be needed to foster those additional reductions.”

Other authors on the study included Dr. Joseph S. Ross, Ji Young Kwon, Jeph Herrin, Dr. Kumar Dharmarjaran, Dr. Susannah Bernheim, Dr. Harlan M. Krumholz, and Dr. Leora I. Horwitz.

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