Hospital Readmission Penalties Reward Patient Populations, Not Quality Care

I’ve been really interested in the shift to value based care, accountable care organizations and related initiatives like reducing hospital readmissions. While their goals are noble and their intent good, I’ve always been afraid that these programs could lead to issues related to discrimination against the most vulnerable populations and those who serve them.

Turns out this article from Harvard Medical School highlights this problem when it comes to hospital readmissions:

To encourage hospitals to improve quality of care, Medicare penalizes those with higher than expected rates of readmission within 30 days of discharge.

The logic behind the penalties is that if patients receive high quality care, including proper discharge planning, they should be less likely to end up back in the hospital.

This seems straightforward, but it turns out that the social and clinical characteristics of a hospital’s patient population that are not included in Medicare’s calculation explain nearly half of the difference in readmission rates between the best — and the worst — performing hospitals, according to the results of a study published in JAMA Internal Medicine.

The article later goes on to highlight how hospital readmission penalties are impacting organizations based on their patient population as opposed to the quality of care they provide:

“The readmissions reduction program is designed to penalize hospitals for poor quality of care, but our findings suggest that hospitals are penalized to a large extent based on the patients that they serve,” said J. Michael McWilliams, HMS associate professor of health care policy and medicine, a practicing internist at Brigham and Women’s Hospital and senior author of the study.

No doubt this is a complex issue, but it’s only going to get more complex as reimbursement models get more complex. The article suggests that one simple solution would be to compare an organization against its baseline instead of comparing it against national averages. Of course, this has the problem of penalizing those organizations who are already doing a good job of reducing hospital readmissions. Maybe we need a mix of a baseline and a national average?

As we continue to develop new reimbursement models that incentivize quality care and penalize poor quality of care, we need to be careful to ensure it reaches the goal and doesn’t just cost healthcare organizations that are serving the most vulnerable and difficult patient populations.

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.