Doctors see frail old people, and sometimes assume they have few remaining days left, and comfort is most important. However at every age we have 8 or more months left, and up to 112 we have over a year of life expectancy left. Those with good minds may want to enjoy that time. With each additional year we live, our life expectancy extends by 9 or 10 months, and with good care and luck we keep living. The data are prepared by the Social Security Administration.
 
CDC has instructions to doctors on filling out death certificates, but there are weaknesses, especially for the minority of patients who die without a recent doctor visit.

Average Years of Life Remaining, by Age, US Population, 2014

Doctors use many versions of the Charlson Comorbidity Index to estimate life expectancy for patients, depending on their age and illnesses (comorbidities). Many versions are little better than chance in predicting life expectancy.

The C statistic is an estimate, from a research project on particular patients, how often an index is more accurate than chance. Values range from 0.50 (no better than chance) to 1.00 (always right). C statistics for different groups of patients are in supplementary tables 1-4 of Yurkovich et al. (2015) Journal of Clinical Epidemiology. v.68(1):3–14. "A systematic review identifies valid comorbidity indices derived from administrative health data." Details of how big the errors are may be found in the original studies, listed by Yurkovich et al.

An older study is Sharabiani et al. (2012 Dec) Medical Care. v.50(12):1109-18. "Systematic review of comorbidity indices for administrative data." . doi: 10.1097/MLR.0b013e31825f64d0 pubmed.gov/22929993

US life expectancy overall, and specifically for people over 65 was improving steadily until around 2011. Since then it has been flat (Bloomberg, and CDC p.116, table 15).

Starting in 2013, US hospitals are treating fewer patients for heart failure, and US death rates from heart failure are rising. Starting at the end of 2012, Medicare began penalizing hospitals for heart failure patients who were re-hospitalized (readmitted) within 30 days. Hospitals cannot always prevent readmissions, so the most effective way to avoid penalties has been to cut the number of Medicare patients they admit for heart failure.
 
Hospitals treated 60,000 fewer patients for heart failure in mid 2012-mid 2015, than in mid 2008-mid 2011, or 20,000 fewer patients during a year, compared to four years ago, before the penalties.
(Source, column CZ of: globe1234.org/hospitals1216.xls)

CDC says in the US:

• Death rates from heart failure fell every year from 2000 to 2012,
• Death rates from heart failure rose in 2013 and 2014.
• Source: cdc.gov/nchs/data/databriefs/db231.pdf, CDC instructions on defining causes of death: cdc.gov/nchs/data/misc/hb_cod.pdf

The higher death rates in 2013 and 2014 mean 7,200 and 9,600 more people died from heart failure in these years than would have died if the 2012 death rate had continued.
 
The term "heart failure" is also called "congestive heart failure" or cardiomyopathy. It refers to weak pumping because of muscle deterioration, stiffness, leaking valves, etc. It is not the same as a heart attack or heart stopping.
 
These are the latest national figures, but five earlier studies from 2010-2014 also found that hospitals which had fewer readmissions had more deaths, especially among heart failure patients.
(Source: globe1234.info/medicare/category/research)
 
Medicare said in August 2012, "We are committed to monitoring the measures and assessing unintended consequences over time, such as the inappropriate shifting of care, increased patient morbidity and mortality, and other negative unintended consequences for patients." (p.53376) They have not reported any of these monitoring results in 4 years.
(Source: federalregister.gov/d/2012-19079/p-1799)
 
The penalties apply to patients treated under Medicare Part B. Hospitals which face the readmission penalties now admit 5% fewer Part B patients for heart failure, even though the total number of seniors covered by Part B increased 12% in the same period.
 
Readmission penalties give hospitals incentives to treat fewer seniors. Medicare even gives hospitals an online tool to predict readmission risk for each potential patient.
 
Hospitals can avoid penalties by any mix of the following:

• Avoid admitting the sickest Medicare patients with heart failure ("There's not much we can do for you. Hospitals are dangerous. You're better off at home.")
  
• Treat as many as possible of the least sick outside of hospitals
  
• Change diagnosis to "hypervolemia," too much water in the blood, which is not penalized, but risky if caught
  
• Improve subsequent care for those admitted, to reduce readmissions
  

It is easier to give less care than to improve it, though hospitals certainly are doing both. And what we see is that death rates have started to rise.
 
The following hospitals had the biggest drops in heart failure patients admitted, comparing the most recent 3-year period to the 3 years before penalties:
 
St Vincent's Medical Center Riverside, Jacksonville, FL, -871 patients
Northwest Community Hospital 1, Arlington Heights, IL, -779 patients
Baptist Medical Center, San Antonio, TX, -724
Community Medical Center, Toms River, NJ, -570
St Luke's Hospital Bethlehem, PA, -543
King's Daughters' Medical Center, Ashland, KY, -536
Beaumont Hospital - Dearborn, MI, -517
Hackensack University Medical Center, NJ, -504
Vassar Brothers Medical Center, Poughkeepsie, NY, -454 patients
 
On the other hand these hospitals may have unique reasons for their changes, and the real story may be among all the other hospitals with smaller drops in heart failure patients. Changes at all hospitals are in a spreadsheet (in column CZ; changes in Part B enrollment are in column DL):
globe1234.org/hospitals1216.xls
 
I counted hospital admissions in July 2012-June 2015, compared to July 2008-June 2011. These are the newest and oldest comparable data available. Medicare released the older data in a comparable form in May 2013. It released the newer data in August 2016.

Hospitals face readmission penalties when they treat Medicare patients for heart failure. Each hospital pays a penalty if more of their heart failure patients than the US average need another hospital stay within a month. So hospitals know they have a 50% chance of a penalty, since about half the hospitals will have readmission rates above average each year. 

Meanwhile for heart attacks, admissions fell 1.3% in the same time period, even though Part B beneficiaries increased 12%. I haven't found death rates from heart attacks, and it seems that all survivors who reach a hospital would be admitted. Have heart attack rates really dropped 13%? Are more people dying before they reach a hospital? Or is something else driving down hospital admissions for heart attacks?
 
For pneumonia, which is the other of the three original readmission penalties, we have to compare 3 year periods ending June 2014 and June 2011, since Medicare expanded the pneumonia categories counted in later periods. Pneumonia admissions fell 4% over that period, while the number of Part B beneficiaries rose 9%. Death rates oscillate each year but were on a downward trend from 1999-2012. It looks as if the trend may not have continued in 2013 and 2014, though it is hard to tell.
statista.com/statistics/184574/deaths-by-influenza-and-pneumonia-in-the-us-since-1950
cdc.gov/nchs/data/health_policy/influenza-and-pneumonia-deaths-2008-2015.pdf
 
Readmission penalties are large. Hospitals get $6,000 for treating a Medicare heart failure patient, but pay a $27,000 penalty for each readmission within 30 days, above the national average rate. For other conditions penalties range from $25,000 to $239,000 per readmission above the national average rate. So every hospital tries to be below the average, driving the average down and the risk of penalties up every year. There are also minimal adjustments for the mix of patients each hospital serves. Penalties total $469 million this year.

There are newer penalties for re-hospitalizing patients after coronary bypasses. The penalty is $188,000 for each one above the national average rate; penalties began October 2017. Penalties after elective hip and knee replacements are $239,000 and began October 2014. The penalty calculations are written into the Affordable Care Act. It is too early to see if the number of people treated has fallen, but the  American College of Surgeons warned Medicare that treatment would be cut: "the potential that these hospitals will decrease their care for such patients, thereby creating an access issue."
(Source: regulations.gov/contentStreamer?documentId=CMS-2013-0084-0090&attachmentNumber=1&disposition=attachment&contentType=pdf)
  
In 67 metro areas, Medicare has a second way to discourage hip and knee replacements, especially for the frailest patients who may need them most: the hospital must pay nearly all medical expenses for 90 days after the hospital stay, though it has no control over these costs. Fewer hip and knee replacements and fewer coronary bypasses, when Medicare patients need them, condemn seniors to reduced activity and faster decline.
(Source: globe1234.info/medicare/publiccomment)
 
For heart attacks and coronary bypasses, Medicare plans the same approach of making hospitals pay 90 days of medical costs, starting July 2017, in 98 metro areas.
federalregister.gov/d/2016-17733/p-3
federalregister.gov/d/2016-17733/p-753

Another page explains some arithmetic behind the readmission penalty calculations, which give hospitals a strong incentive to serve fewer patients.