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Blog: Do patients held for observation skew performance on quality measures?

By Melanie Evans 
Modern Healthcare, Vital Signs, Aug. 27, 2015

Just how much success have hospitals had in their efforts to prevent patients from returning soon after leaving? Perhaps not as much as reported, two physicians argue at the blog for health policy journal Health Affairs. 

Why? Because Medicare patients who end up in hospital beds for observation technically do not count as repeat visitors. 

The number of patients who are held for observation has grown, as has been widely reported, as Medicare began to audit short hospital visits and deny full payment for admissions.

But David Himmelstein and Steffie Woolhandler, doctors and researchers with the City University of New York School of Public Health, argue that the desire to avoid readmissions is another incentive for hospitals to hold patients for observation. Medicare tracks return trips to the hospital and penalizes hospitals with high rates of readmissions. Most (76%) face penalties for 2016, according to a Modern Healthcare analysis. 

“Recent data indicates that such gaming isn't just a theoretical possibility,” they wrote. That is not just a problem for quality improvement. For patients, observation stays can come at an added cost because of Medicare coverage rules. (A newly enacted bill requires hospitals to let patients know they are being held for observation.)

The doctors cite analysis of data between 2010 and 2013 by the Yale New Haven Health Services Corp.'s Center for Outcomes Research and Evaluation that was conducted for the CMS. 

The data show a “significant but weak” inverse correlation between observation stays for heart attack patients who recently left the hospital and readmission rates for heart attack patients. 

Himmelstein and Woolhandler also note that rising emergency department visits for heart attack patients who recently left the hospital further diminish the readmission performance. “For patients discharged after heart attacks, the urgent return rate has actually risen slightly; the reported 1.8% fall in readmission is more than offset by a 0.7% increase in observation stays and a 1.2% increase in ED visits,” they wrote. 

The analysis also found weaker evidence that observations and emergency department visits replaced readmissions. The correlation was “very weak” but significant for heart failure, pneumonia and chronic obstructive pulmonary disease. 

For some readmissions measures, the analysis found no evidence at all. There was no correlation for patients who had a stroke, hip or knee replacement or for hospitalwide readmissions. 

However, Woolhandler notes readmission penalties applied only to heart attacks, pneumonia and congestive heart failure between 2010 and 2013. 

The doctors wrote that some hospitals have likely worked hard to prevent readmissions.

“These aggregate figures surely hide vast differences among hospitals,” they wrote. “Some hospitals have undoubtedly reduced readmissions by doing the hard work of fully stabilizing fragile patients prior to discharge, improving communications with outpatient providers, assuring diligent follow-up, etc.” 

However, that may not always be the case, they concluded. 

“But others appear to be hitting their readmission targets mostly by gaming the system—re-labeling rather than re-designing care,” they wrote. "Medicare rewards both approaches equally, but for hospitals, re-labeling is probably far cheaper (and more profitable) than re-designing.” 

Medicare's incentives are poorly designed and allow for cheaters to flourish, they said. 

The report quotes the graffiti artist Banksy, who once said, "Become good at cheating and you never need to become good at anything else.”

http://www.modernhealthcare.com/article/20150827/BLOG/150829910