Study: Obamacare hurting vulnerable hospitals

Safety-net hospitals are getting hit by Obamacare's push to penalize poor quality, the latest evidence of problems with the law's effort to improve quality of care.

A new study from Harvard Medical School found that safety-net hospitals that treat many low-income or uninsured individuals are being penalized more for hospital readmission rates than other hospitals.

If a hospital readmits too many patients 30 days after they are discharged after being treated for a certain condition, that hospital gets penalized. A hospital could receive up to a 3 percent reduction in its Medicare annual patient payments.

The policy, which started in 2011, a year after Obamacare was passed, is intended to address a quality issue at hospitals. It is part of a larger shift in Obamacare to transition Medicare payments away from traditional fees for service toward a new model that rewards quality care.

But the measure needs major tweaking, the study concludes.

Hospitals with high readmission rates may be penalized to a large extent based on the patients they serve, the study said.

Hospitals that serve sicker patients are more likely to have readmissions. That disproportionately affects safety-net hospitals that take on a greater share of poor or vulnerable populations, the study said.

"By penalizing these hospitals more severely it could potentially exacerbate [health] disparities because these are the hospitals that have the least resources," Dr. Michael Barnett of Harvard Medical School and author of the study told the Washington Examiner.

The study is the latest to point out problems in Obamacare's shift toward rewarding better quality.

Nearly half of U.S. doctors don't like the new metrics much, according to a recent survey from Kaiser Family Foundation and Commonwealth Fund.

The survey found that about 52 percent of physicians found that the penalties, up to a 3 percent reduction in each Medicare payment, are hurting care.

Barnett said that rewarding and determining quality is needed. "Measuring quality is more important than not measuring it," he said.

But how quality is measured may need to be tweaked.

Take the readmissions policy. The study offers two alternatives for determining whether a hospital is penalized.

One alternative would have a hospital be measured by how its readmission rate improves rather than whether it meets a national average.

"Hospitals could be rewarded based on improvements off what their prior performance has been," Barnett said.

Another alternative is for a hospital to become an accountable care organization. The concept gives a hospital a spending growth target that it has to meet for its Medicare patients.

If spending is less than the target, the hospital has to share some of the savings with the federal government, Barnett said.

Since 2011, nearly 750 healthcare organizations have converted to become accountable care organizations, according to the healthcare firm Leavitt Partners, which assists organizations to switch. Founder Mike Leavitt is a former three-term governor of Utah.

Another important part of redesigning the readmission measure is to ensure that people won't be able to game the system.

Some studies have found that hospitals are trying to find ways to avoid listing readmissions. For instance, hospitals are increasingly "observing" discharged Medicare patients who return to the hospital, rather than readmitting them. Observing a patient means the patient gets the same care, but the hospital doesn't have to readmit him.

However, that practice can increase the patient's out-of-pocket costs because observation status is often classified as outpatient services, according to an article in the journal Health Affairs. Under Medicare rules, patients could face higher co-pays since Medicare may not cover as much for outpatient services.

President Obama recently signed a new law that requires hospitals to inform patients of their observational status.

Barnett said he hasn't seen compelling evidence that this "is happening on a major scale in any significant place."

However, he did note that reducing such loopholes could be done through designing better quality metrics and "nudge [providers] in the best possible direction."

http://www.washingtonexaminer.com/study-obamacare-hurting-vulnerable-hospitals/article/2572027

http://www.washingtontimes.com/news/2015/sep/15/cbo-repealing-obamacare-mandate-would-save-305b/