Friday, April 1, 2016

Why have re-admission rates fallen? (answers)

Based on comments to our earlier post about re-admission rates falling, I think I know know the answer:

1.  re-defining "admission" as "observation": Many Medicare patients are placed under “observation status’’ when they arrive at a hospital. That means they are considered outpatients and are not formally admitted, even if they are given a bed.  As a result, “the ratio of observation use to inpatient stays per 1,000 beneficiaries increased by 94 percent.” (link here)

2.  Hospitals are offering (better?) alternatives to hospital re-admission, e.g.,
"...we created a triage clinic--essentially a "walk-in" clinic for our patient population to be seen with any urgent issue after discharge. This has cut down on both ED visits and re-admissions."


  1. To determine each hospital’s penalty, CMS looks at the readmissions rates of patients who initially went into the hospital for one of five conditions but returned within 30 days of discharge. Since the program began, it has examined three conditions: heart failure, heart attack and pneumonia. Two new conditions were added in 2014: chronic lung problems, such as emphysema and bronchitis, and elective hip and knee replacements.

    For penalized hospitals, CMS will reduce each payment for a patient stay from October 2014 through September 2015, which is the federal fiscal year. These penalties apply to patients admitted for any condition, not just the five conditions that were used to determine if a hospital had too many readmissions. Thus, if Medicare would normally pay a hospital $15,000 for a kidney failure patient, with a 1.5 percent penalty Medicare would deduct $225 and pay $14,775. The penalty does not apply to other Medicare payments that compensate for hospitals’ general operating expenses, their training of medical residents or their treatment of large numbers of low-income patients.
    If a hospital has fewer than 25 cases for any of the five conditions being monitored, CMS omits that condition in its analysis. But hospitals could still receive a penalty if they have 25 cases or more in one of the other conditions. The evaluations did not include readmissions of patients who are in private Medicare Advantage insurance plans.

    CMS’ penalties are an “adjustment factor” that will be applied to Medicare reimbursements for care for patients admitted for any reason. The lowest adjustment factor, 0.97, is the maximum penalty; it means that a hospital would be reimbursed only 97 percent of the amount Medicare usually pays. The highest adjustment factor is 1 and means that a hospital would receive the full Medicare reimbursement.

    Rau, Jordan (2014)

  2. I sincerely believe that while the health care industry is trying to decrease the amount of re-admissions and unnecessary emergency room visits that there are some hidden ulterior motives behind the agenda. Just like everything else, our health care system is just another business with big connections to other industries. According to Dr. Rothberg, he states that....

    "that risk-adjusted readmission rates declined for acute myocardial infarction, heart failure and pneumonia. Hospitals were judged on not on their observed readmission rates, but on their observed/expected rates, adjusted for patient comorbidities."

    In other words it’s important to breakdown not only why readmissions rates declined, but also the types of patients that were not being readmitted. The current Delivery System Reform Incentive Program (DSRIP) that will try to reduce the amount of hospital use by 25% over the next five years in New York City will definitely help bring more jobs to the community as well create a bigger focus on prevention. Health care is a billion dollar industry and it’s important to keep a close eye on how all of the changes will affect not only health care professionals but the population at large.


    Rothberg, M. B., & Vakharia, N. (2014, October 29). Readmissions Are Decreasing—Is It Time to Celebrate? Retrieved May 01, 2016, from

  3. Although what I might say may eventually sound silly, but been in field like Forex, I say it’s all about service. I have seen many brokers getting lesser investment once their service dips, so similarly here is also the case. I work with OctaFX and due to their service, there are just growing, so ultimately things are all down to service and that will decide up for things and nothing else will matter if that’s there, but if service is not there then we will see such stuff.

  4. I also believe that the reason for falling re-admission rates has to do with the now widely used “observation” status. These patients are not technically “admitted”. Working in a hospital for 10 years as a Physical Therapist these patients are considered priority and there is a big push to get them out of the hospital. They also use this if there is not a sufficient reason for the patient to be admitted. For example an ankle fracture is not a sufficient reason even though the patient may be 90, lives alone, is non weight bearing, and has a flight of stairs at home. This is one of the reasons I got out of healthcare. We were always working for the numbers, bench marks etc, instead of doing what was in the best interest of our patients. We were being rewarded for quantity rather than quality. Bringing in another topic that has been discussed, there may be growing pains with the bundled payment program but in the end hopefully it will allow patients to receive quality care to avoid readmission instead of hospitals finding ways to “trick” the numbers.