Editorial

Editorial: Medicare wisely prods hospitals

Medicare is giving hospitals incentive to avoid

Medicare is giving hospitals incentive to avoid readmissions of patients by threatening to withhold payments. (Credit: Angela Gaul)

Medicare's move to penalize hospitals that have high readmission rates will spare some patients the ordeal of landing back in the hospital just days after being discharged. If it also helps to contain the soaring cost of health care, that will be a welcome bonus for taxpayers.

Starting Oct. 1, Medicare began withholding up to 1 percent of its base payments to hospitals that, compared with other hospitals, readmit a large percentage of Medicare patients within 30 days of discharge. About 2,200 hospitals -- two of every three that serve Medicare patients -- will be hit with penalties this year averaging $125,000. That's not a huge amount, but fines will rise to a maximum of 3 percent of the reimbursements in 2015.

Holding facilities accountable for readmissions should prod their staffs to focus more on what happens to patients after discharge. That's an important change.


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Patients who miss follow-up doctor visits or are confused about revised drug regimens often land back in the hospital. So do those who can't afford prescribed medication or lack the help they need at home while convalescing. Hospitals have traditionally considered such factors to be beyond their control. Now Medicare has given them an incentive to abandon that view and expand efforts to manage patient care after discharge.

Some private insurers use increased payments to reward hospitals for limiting readmissions. Reducing payments makes more sense for the deficit-riddled federal government, which must control Medicare costs. And it's a step toward the important reform of paying providers for quality outcomes rather than for each test and procedure they perform.

For now hospital readmissions will be measured only on three medical conditions: heart attacks, heart failure and pneumonia. Medicare officials said that may be expanded to include joint replacements, stenting, heart bypass and strokes.

For Medicare patients, better care plus fewer hospitalizations should equal an improved quality of life.

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