Fed data contradicts theory that observation stays skew readmissions data

New research discounts the theory that hospitals were able to reduce readmissions and avoid federal financial penalties by increasing observation status admissions.

The Department of Health and Human Services touted the new study published in the New England Journal of Medicine as evidence that the Affordable Care Act (ACA) has cut preventable readmissions. 

HHS researchers analyzed data from 3,387 hospitals and found readmission rates have fallen sharply since the ACA's implementation, particularly for conditions that carry readmission penalties under the healthcare reform law. Readmission rates dropped from 21.5 percent to 17.8 percent from 2007 to 2015, according to the findings, and rates for nontarged conditions declined from 15.3 percent to 13.1 percent. 

Although the study also found an increase in observation status, researchers noted the trend began in 2008, two years before the passage of the ACA. Moreover, researchers found that while the "preventable readmissions" measure has trended downward, so too have overall returns to the hospital within 30 days of discharge, a broader measure that encompasses observation stays as well as readmissions.

"Readmission trends are consistent with hospitals' responding to incentives to reduce readmissions, including the financial penalties for readmissions under the ACA," the authors wrote. "We did not find evidence that changes in observation-unit stays accounted for the decrease in readmissions."

In an HHS blog post, Rachael Zuckerman, an economist with the HHS Office of the Assistant Secretary for Planning and Evaluation, presented the research as vindication for the readmissions program in the face of the allegations of deceptive hospital practices. She said that "the Hospital Readmissions Reduction Program is just one part of the Administration's broader strategy to promote better care, smarter spending and healthier people by paying providers for what works, unlocking healthcare data, and finding new ways to coordinate and integrate care to improve quality" through advancements such as accountable care organizations.

To learn more:
- read the study abstract
- here's the blog post