Get Out and Stay Out (of the hospital)

America doesnt have one problem with its healthcare apparatus*, but many – including shorter lives, higher costs, and inadequate access to care. The ACA is likewise meant to ameliorate not one but several problems. One change the ACA introduced are penalties for underperforming hospitals, whose patients have a tendency to go back to the hospital within a short time of being discharged.

Hospitals are the most expensive place to render healthcare, with per-patient costs typically approaching $2000 per day, and the aggregate amounting to about one-third of all US national health expenditures. Medicare noticed that, all too often, shortly after someone is discharged from a hospital, they get readmitted for reasons that were entirely avoidable. And while high readmission rates dont speak well of patients’ health, they’re great for the health of a hospital’s bottom line, because hospital stays are highly profitable – and two stays pay twice as much as one. Churning patients out and ignoring them is great business for hospitals, but awful for patients, and costly to insurers. But under new ACA readmission rules for Medicare patients, that jig is up.

Across the country, so-called “readmission rates” vary considerably place to place and hospital to hospital. The ACA made changes in Medicare to penalize hospitals with high readmission rates – to give them a stiff incentive to see to it that their patients remain healthy after discharge – so that physically leaving a hospital does NOT also mean leaving their care altogether. The new rules only apply to Medicare patients who go to the hospital for 3 specific conditions: heart attack, heart failure or pneumonia. If, after discharge, such a patient is readmitted to any hospital within 30 days, it’s counted against the original hospitals’ readmission stats. If the rate goes too high, penalties accrue – with the size of the fine commensurate with hospital performance.

The good news is that hospitals are altering their post-discharge procedures for the better. To ensure that patients understand post-discharge care instructions, hospitals are following up with phone calls. They’re dispatching nurses to make house calls. They are GIVING AWAY FREE MEDS to their poorest patients! While all of this costs money, overall these new policies are cost-effective, simply because hospitalizations are so outrageously expensive that you can spend a small fortune avoiding them and still come out ahead. The fines are meant to get hospitals on the same page with patients and their insurers.

So far so good: According to a CEA report, growth in healthcare costs during 2010-13 were the lowest ever recorded in any 3 year period in US history, with Medicare leading the way, and hospitalizations performing especially well. In the years ahead, Medicare plans to add other diseases to the no-fly list for readmissions – and private insurers are expected to phase in their own penalties for underperforming hospitals. The US healthcare apparatus is multi-faceted, and solutions to its many issues will require creativity. But the new Medicare readmission policy so far is working as planned – for the good of senior’s health, and for the good of the nation’s financial health as well.




* some, CT included, use the term “US healthcare system” – but “system” is simply too flattering. “apparatus” is itself too kind, if easier to type than “thingamabobby.”


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