Hospitals are dammed if they do, dammed if they don’t. The federal government is pushing them to reduce 30 day readmissions to lessen the Medicare spend. However, when hospitals comply, they get bit. An example taken from a recent post to the Bloomberg News website.
The Mount Sinai (NY) experience may be instructive. From September 2010 to May 2011, the hospital’s Medicare revenue rose only 2 percent over the previous year — in part because the number of inpatient cases fell. Why was that? One important reason was that the number of patients readmitted to the hospital within 30 days of discharge was 5 percent less than what it had been the previous year.
The post continues;
Reimbursement from Medicare is still primarily based on how many services hospitals perform rather than on how well they care for patients, so hospitals are often financially penalized for improving value and quality. The Mount Sinai program to reduce readmissions, for example, is costly for the hospital both because of the extra expense of running it and because fewer readmissions means less revenue. Ken Davis, the president and chief executive officer of Mount Sinai, says the hospital won’t be able to afford continuing the successful program if the financial incentives remain so skewed against it.
Granted the author, Peter Orszag has a political agenda with his views, having been a President Obama’s former director of the Office of Management and Budget. However, the only reason Mt Sinai is even looking at reducing 30 day admissions is because they are no getting paid for it. However if at the end of the day, the math doesn’t work, look for it and other hospitals to question their readmission reduction programs.
Patching the Boat 