Outcome Measurements Could Be a Two-Edged Sword


In 2007, with the purported intent of ‘promoting high-quality, patient–centered care and accountability,’ the Centers for Medicare and Medicaid Services (CMS) and Hospital Quality Alliance (HQA) began making public each hospital’s 30-day mortality outcomes for acute myocardial infarction and heart failure. The reporting was extended to pneumonia, in 2008. To add even more impetus, a federal program, called Value-Based Purchasing, was created that assigned penalties in Medicare reimbursement to hospitals that didn’t meet CMS’s stipulated clinical-care measures, while giving bonuses to those hospitals that exceeded them. Although the percentages of the penalties were most often far less than one percent (maximum of 1.25%), the losses mounted to hundreds of thousands in revenue to the so-called under-performing hospitals. In a report by Fierce Health Care in August of last year, 2,225 of the nation’s 5,700 hospitals will receive Medicare payment reductions totaling $227 million starting October 1, 2013.

More recently, under section 3025 of the Affordable Care Act, the Hospital Readmissions Reduction Program (HRRP) was established which requires CMS to reduce payments to IPPS hospitals (those that participate in the Medicare part A funding) with excess readmissions, beginning on October 1, 2012. Under the dictates of the program, CMS began reimbursing hospitals less if a Medicare patient is readmitted for the same problem within 30 days of discharge. Although less touted than the goal of improving the quality of heath care, the leadership of CMS, and those that dictate their policies, have come to the decision that one of the ways to control this country’s spiraling health care costs is by reimbursing health care services based on outcomes. The assumption is that by rewarding good results, or, more often, penalizing poorer results, the outcomes will be better.

On the positive side, these CMS requirements will most likely create better discharge planning, and efficiencies in the utilization of diagnostics and the prescribing of therapeutics. However, this goal to increase efficiency, and thus cost savings, using outcome measurements, introduces the potential for several disturbing consequences. It also casts disparaging insinuations on a profession that prides itself on quality, dedication and beneficence.

The inference that physicians and hospitals will only give their full measure unless incentivized by rewards or face penalties, is not only degrading but inflammatory. The premise also potentially cheapens the patient/doctor relationship from professional to one of prostitution— pay more to get more. It works for ‘the trade,’ but in the professional world, that must deal with the unpredictable science of medicine, third party mandates and a sue-crazy public, the premise does not always hold true.

In the case of the recent CMS HRRP program, the use of perverse incentives doesn’t necessarily reward the institutions and the physicians that have better measurable outcomes (fewer readmissions), but more often penalizes those who have a higher readmit rate. Varying age, education and severity demographics play significant roles in outcomes, but tend to distort the results. More than that, it discourages physicians and health care institutions from moving or expanding into locales where the sickest patients often congregate.

A recent study by Health Service Research reported that hospitals that treat more poor seniors who are both Medicare and Medicaid have higher rates of readmission.  Lane Koenig, Ph.D., president of KNG Health Consulting in Rockville, MD, who was the author of the study, quotes, “While these hospitals are more likely to be hurt, they are also more likely to be struggling financially.”

What are the population demographics surrounding the referring area of the admitting institution? What about referral institutions such as city/county hospitals, heart hospitals and cancer centers? Should they be held to the same standards with respect to readmission criteria?

Koenig went on to say, “currently, CMS does not take socioeconomic status into account when calculating readmission rates. It is possible that adjusting HRRP calculations for socioeconomic data could mask disparities in quality of care. The counter argument is that by not adjusting it, you may be penalizing hospitals simply because they treat a potentially sicker or more-difficult-to-manage population.”

Often left out of the discourse, are the patients’ perceptions, when they see that the hospital they use when they are sick, is being penalized because of lack of compliance with Medicare’s so-called standards. Similar to the ‘best doctor’ lists periodicals often publish to sell more advertising space in their publications, it potentially raises doubts if the patient’s doctor is not on the ‘list.’ Then there are the liability concerns that arise with poor results, if patients feel that their care was below the standards rather than an ‘act of God.’

Also, there are the extra costs and resources necessary to insure compliance. (As an example, there are the projected 1000s of additional IRS agents necessary to enforce compliance of the Individual Mandate clause of the ACA). What party established the standards? It harkens back to the DRGs. With respect to the CMS readmit policy, is there a real difference between four weeks and five, except for the differing reimbursement levels?

More important, what parties suffer the most? The answer is easy— the sicker and more vulnerable patients and the very hospitals that they rely on to get them through their difficult times. It also raises concerns as hospital systems evaluate development in new areas or expansion of their current facilities. Why go to or grow areas with potentially sicker populations?

The desire to encourage better discharge planning and increase efficiencies is sound. But, as with DRGs, there are patients who are potentially put at risk. A past example is the mothers, and their newborns, whom would have benefitted by an extra day or two stay in the hospital. In this more recent case, it’s the most fragile elderly, often who return to their less protected environments.

The larger question that lurks in the background is what do outcome measurements and other government mandates such as electronic medical records, e-prescribing, DRGs and the upcoming ICD 10 requirements, that are being pushed onto medicine, have in common? One would like to think that they are to allow more efficient utilization of our limited health care resources.  To advance the level of health care services to a larger sector of the population. To control the escalating costs that threaten this country’s future financial viability.

The answer may be all three or none of the above. The chilling observation is that by controlling a country’s heath care system, the rest will soon follow was once considered Orwellian.

Now, I’m not so sure!

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