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International Journal of Health Economics and Management

Published in:

01-03-2018 | Research Article

Reducing excess hospital readmissions: Does destination matter?

Author: Min Chen

Published in: International Journal of Health Economics and Management | Issue 1/2018

Abstract

Reducing excess hospital readmissions has become a high policy priority to lower health care spending and improve quality. The Affordable Care Act (ACA) penalizes hospitals with higher-than-expected readmission rates. This study tracks patient-level admissions and readmissions to Florida hospitals from 2006 to 2014 to examine whether the ACA has reduced readmission effectively. We compare not only the change in readmissions in targeted conditions to that in non-targeted conditions, but also changes in sites of readmission over time and differences in outcomes based on destination of readmission. We find that the drop in readmissions is largely owing to the decline in readmissions to the original hospital where they received operations or treatments (i.e., the index hospital). Patients readmitted into a different hospital experienced longer hospital stays. The results suggest that the reduction in readmission is likely achieved via both quality improvement and strategic admission behavior.

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The specific formulas to calculate the readmission adjustment factor can be found at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program.html.

According to CMS, the Hospital Readmissions Reduction Program calculations only include short-term acute care hospitals paid under the Inpatient Prospective Payment System (IPPS), and acute care hospitals in Maryland participating in the All-Payer Model.

American Hospital Directory. Hospital statistics by state is based on each hospital’s most recent Medicare cost report.

For instance, the total Medicare reimbursements per enrollee for fee-for-service patients enrolled in Medicare Parts A and B range from $9685 in Sarasota, FL to $13,596 in Miami, FL, both are hospital referral regions.

In Florida, the 30-day all-cause readmission rates for heart attack, heart failure and pneumonia in 2008 are 19.3, 21.3 and 16, respectively. The national counterparts are 18.7, 21.4 and 15.3, respectively. Please refer to the Dartmouth Atlas (http://www.dartmouthatlas.org/) for more data details.

The specific ICD-9-CM codes for acute myocardial infarction (excluding one-day stay) include: 410.00, 410.01, 410.10, 410.11, 410.20, 410.21, 410.30, 410.31, 410.40, 410.41, 410.50, 410.51, 410.60, 410.61, 410.70, 410.71, 410.80, 410.81, 410.90, and 410.91. Congestive heart failure (CMS definition) includes principal diagnosis code (ICD-9-CM) 402.01, 402.11, 402.91, 404.01, 404.03, 404.11, 404.13, 404.91, 404.93, 428.0, 428.1, 428.20, 428.21, 428.22, 428.23, 428.30, 428.31, 428.32, 428.33, 428.40, 428.41, 428.42, 428.43, and 428.9. Pneumonia (CMS definition) includes principal diagnosis code (ICD-9-CM) 480.0, 480.1, 480.2, 480.3, 480.8, 480.9, 481, 482.0, 482.1, 482.2, 482.30, 482.31, 482.32, 482.39, 482.40, 482.41, 482.42, 482.49, 482.81, 482.82, 482.83, 482.84, 482.89, 482.9, 483.0, 483.1, 483.8, 485, 486, 487.0, and 488.11.

For instance, AMI’s 30-day readmission rates to index versus non-index hospitals are 13.01 and 4.31% in 2006; 11.27 and 5.89% in 2014. In 2006, readmissions to non-index hospitals accounted for 25% of the total 30-day readmissions; and its share increased to 34% in 2014. From 25 to 34%, it is a 38% increase.

For the latter, recent trends show a sharp increase in hospitals’ use of observation status when treating Medicare patients (Feng et al. 2012; Woolhandler and Himmelstein 2016).

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Title: Reducing excess hospital readmissions: Does destination matter?
Author: Min Chen
Publication date: 01-03-2018
Publisher: Springer US
Published in: International Journal of Health Economics and Management / Issue 1/2018
Print ISSN: 2199-9023
Electronic ISSN: 2199-9031
DOI: https://doi.org/10.1007/s10754-017-9224-x

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