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Adjustment for more patient factors reduces hospital variation in readmission rates

When adjusting for additional clinical and social variables, hospital variation in readmission rates are reduced, according to findings published in JAMA Internal Medicine.

“In several pay-for-performance programs, Medicare ties payments to readmission rates but accounts only for a limited set of patient characteristics — and no measures of social risk — when assessing performance of health care providers (clinicians, practices, hospitals, or other organizations),” Eric T. Roberts, PhD, from the University of Pittsburgh Graduate School of Public Health, and colleagues wrote.

“Debate continues over whether accounting for social risk would mitigate inappropriate penalties or would establish lower standards of care for disadvantaged patients if they are served by lower-quality providers,” they added.

Roberts and colleagues assessed Medicare claims for admissions in 2013 through 2014 and linked U.S. Census data to determine how adjusting for additional clinical and social patient characteristics not currently used for risk adjustment in the Hospital Readmission Reduction Program affects hospital readmission rates. Hospitals’ distinct contributions to readmission from the adjustment were excluded.

A total of 1,169,014 index admissions among 1,003,664 unique Medicare beneficiaries (41.5% men; mean age, 79.9 years) in 2,215 hospitals were included in the analysis.

The additional clinical characteristics studied included Hierarchical Condition Categories indicators, Chronic Conditions Data Warehouse conditions, disability as the original reason for Medicare enrollment, end-stage renal disease and long-term residence in a nursing home. Social characteristics included insurance factors (dual Medicare and Medicaid enrollment, Medicare Savings Program recipients, Part D low-income subsidy recipients and no subsidies or prescription drug coverage), poverty rate, household income, educational attainment and the proportion of residents living alone in the beneficiary’s zip code and U.S. Census tract.

The researchers found that there was a 9.6% reduction in the overall variation in hospital readmission rates when adjusting for the additional characteristics compared to when adjusting for characteristics currently implemented by Medicare. The 10% of hospitals most affected by the additional adjustments indicated an increase or decrease of 0.37 to 0.72 percentage points in hospital readmission rates.

Researchers estimated that additional clinical and social adjustments would reduce penalties by 52% for hospitals with the largest 1% of penalty reductions, 46% for the hospitals with the largest 5% and 41% for hospitals with the largest 10%.

Moreover, the mean difference in readmission rates between hospitals in the top and bottom quintiles of high-risk patients was reduced by 54% when the additional adjustments were accounted for, compared with the CMS adjustments alone.

Reductions in readmission rates were due to both clinical and social characteristics. Conditions targeted by the Hospital Readmission Reduction Program had significantly greater reductions.

Changes in readmission rates or death were greater than readmission rates alone when adjusting for social characteristics.

“Our study contributes to evidence of the unintended consequences of limited risk adjustment in pay-for-performance programs for providers serving clinically and socially higher-risk patients,” Roberts and colleagues concluded. “Our results support policies to adjust readmission rates for a more comprehensive set of patient characteristics, including social risk factors, to minimize the potential for pay-for-performance programs rates to exacerbate health care disparities, as well as alternative strategies to improve quality and address disparities.”

In a related editorial, Julie Bynum, MD, MPH, and Valerie Lewis, PhD, both from The Dartmouth Institute for Health Policy and Clinical Practice, wrote that the findings by Roberts and colleagues serve as a reminder to recognize the “small but critical details” of how payments are established.

“Across all payment models, whether [Merit-based Incentive Payment System], readmission penalties, Medicare Advantage, or Accountable Care Organizations, risk adjustment has the ability to induce clinicians to either attend to the needs of vulnerable populations or shy away from them,” they wrote. “We must develop a consistent and equitable approach to risk adjustment that takes into consideration evidence on the costs of care associated with both clinical and social conditions as well as how organizations will respond when addressing the differential costs of managing the care of vulnerable populations.” – by Alaina Tedesco

Disclosure: The authors report no relevant financial disclosures.