How Hospitals Can Manage Risk
Each penalty is much larger than the money earned from initially treating the patient. Caring for any Medicare patient frail enough to have a large readmission risk has become financially risky and an act of charity. Medicare even offers software to show which patients have high readmission risk, so hospitals can be very aware of them. In advising Medicare patients, Medicare now wants hospitals to consider financial risk to themselves, as well as medical risk to patients.
Hospitals can in theory address their risks with Medicare patients by: (A) improving care, (B) taking the riskiest patients out of the statistics system, or (C) serving more low risk patients.
(A) Improving care has several aspects:
(B) Taking the riskiest patients out of the statistics can include:
(C) Serving more low risk patients will not save Medicare money, but can save the hospital money. It can include:
Whenever medically defensible, the hospital would earn more by avoiding risky Medicare patients in the listed diagnoses, since serving these patients raises the number of readmissions. Hospitals have large financial penalties for readmissions, though not for deaths.
National Partnership for Women & Families noticed the incentive problem when the penalty was first enacted in 2010, "models like hospital readmission penalties may create perverse incentives for providers to reduce or avoid providing care to complex patients who could be less profitable under these models" (p.6).
Health providers who join an Accountable Care Organization (ACO) have further reason to promote symptom relief and minimize treatment. They gain from cost savings, lose from readmissions (p.10) and even from admissions (pp.12-13), and have no loss from death. Patients will not be well informed. A list of ACOs is here.
Too much penny-pinching in government health care leads to separate systems with unequal care: "in the General Hospital, the government pays Siloam [an Indonesian hospital chain] a capped price per patient for a given condition; in Lippo Village most patients pay for themselves" (Economist 17 May 2014)
This site does not provide
legal or medical advice.
The site does not
hospitals or anyone. It
mostly from Medicare, so
you can decide.
Dates are assigned
arbitrarily to sort
the articles. Most
articles have been
written or updated
Like: Facebook, Twitter,