Readmission Penalties: Little Impact on Controlling Medicare Costs?

Reducing readmissions, a major tactic by Medicare to reduce costs, will have little effect stemming the biggest drain on the Medicare expenses, a new study has found.

“The premise behind these and related interventions is that high-quality outpatient care should reduce unnecessary hospitalizations for high-cost patients,” writes Dr. Karen Joynt, of the Harvard School of Public Health, in a study to be published in the June 26 edition of JAMA. “However, there are few data on the proportion of inpatient hospitalizations among high-cost patients that are potentially preventable.”

Medicare currently penalizes hospitals with high readmission rates, but that approach will not be effective in reducing patients who receive the largest proportion of Medicare dollars, the study found.

As 10 percent of Medicare patients represent 50 percent of the costs, Joynt and her colleagues studied data of 1.1 million Medicare patients found that a relatively small percentage of the expenses behind that to 10 percent could have been prevented.

“The biggest drivers of inpatient spending for high-cost patients were catastrophic events such as sepsis, stroke, and myocardial infarction, as well as cancer and expensive orthopedic procedures such as spine surgery and hip replacement,” the study learned. “These findings suggest that strategies focused on enhanced outpatient management of chronic disease, while critically important, may not be focused on the biggest and most expensive problems plaguing Medicare’s high-cost patients.”