Are hospitals being punished by Medicare for treating poor patients?

Medicare may penalize many hospitals for patient readmissions due to circumstances that are beyond their control, according to Forbes contributor Peter Ubel.

The Centers for Medicare & Medicaid Services will penalize more than 2,600 hospitals this fiscal year for readmissions of patients being treated for a variety of ailments. The penalties can be as much as 3 percent of total Medicare revenue, although most institutions receive penalities that are far less than that.

Ubel cited a study of patients being treated by the Henry Ford Healthcare system in Detroit. "All else [being] equal, unmarried patients and patients from poor neighborhoods were significantly more likely to be readmitted to the hospital within 30 days of their initial discharge," Ubel wrote.

Other studies, such as those of patients with congestive heart failure, concluded that those patients were up to 17 percent more likely to be readmitted within six months of discharge if they live in a neighborhood with a low socioeconomic status. That gap persists despite a number of controls put into place, according to the study, which appeared earlier this year in the journal Circulation. Physician mix and the quality of a particular region's nursing homes may also play a role in readmissions.

Ubel argued that such demographics were beyond hospital management's ability to control--a conclusion similar to that of a study recently published in the American Journal of Managed Care. And while providers could keep such demographics under consideration when providing care, singling out those specific groups could prove too pricey to cancel out Medicare's financial penalties for patients that are readmitted.

"Medicare needs to tweak its reimbursement model, to better account for socioeconomic factors known to influence hospital readmission rates," Ubel wrote.

To learn more:
- read the Forbes article

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