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14 May 2019


No doubt some policy makers and health system mandarins feel pleased with themselves following the introduction of the Hospital Acquired Complications penalty system. 

While it is plausible that the rates of these complications may decrease, any potential positive effect from the policy would need to be differentiated from prior trends, influence from other programs, and the cost of diversion of resources from other safety and quality activities hospitals could be undertaking. 

There is always the potential for a persuasive guise to cloak a thoughtless, bad policy (there is no robust evidence basis for HAC penalties) spawning unintended, harmful consequences or deficient outcomes in practice.

There have been murmurings for some time now that the next step should be penalties around unplanned early or ‘inappropriate’ re-admission to hospital. The USA has provided some experience and evidence in this philosophy which should give pause for thought. 

The Hospital Readmission Reduction Program (HRRP) started in 2009.  The HRRP imposed financial penalties on hospitals based on rates of 30-day risk-standardised hospital readmission for heart failure, acute myocardial infarction, and pneumonia, with up to three per cent of a hospital’s total Medicare revenue from admissions for any condition at risk. In 2018, 80 per cent of the hospitals subject to the HRRP were penalized, amounting to $564 million in reduced payments by Medicare1

The introduction of the HRRP was associated with reductions in hospital readmissions nationally, and the program has been declared a success and worthy of expansion by vainglorious policy makers. But is it?

It now appears that the reduction in readmissions were not the result of improved transitional care quality, which would have decreased unplanned returns to the hospital within the first 30 days. Instead, the apparent reductions were largely driven by unplanned returns to the hospital within 30 days of being directly discharged from the emergency department or coded as observation stays. 

Rather than improved patient outcomes, there is the lamentably predictable possibility that necessary inpatient care was restricted.  Wow… there was no way of seeing that coming!

In my field, penalising readmission for patients with exacerbations of COAD has not been shown to work for similar reasons, but also because these vulnerable patients can be readmitted with other reasons e.g cardiac, not related to their prior inpatient stay. 

Moreover, prompt follow-up has not been shown to reduced re-admission rates and in other settings e.g. post arthroplasty, general frailty was a good predictor of readmission, mortality and complications. General concerns regarding unintended harmful consequences of policies targeting readmission rates have therefore proven worthy. 

Evaluation of the full USA Medicare database revealed a 1.3 per cent absolute increase in 30-day risk-adjusted mortality in patients with heart failure and a concomitant increase in one-year mortality, after the implementation of the HRRP.  Prior to the HRRP clinicians were winning and mortality rates had been declining.

Thirty-day mortality after acute MI remained static with the HRRP. For pneumonia, the 30-day mortality was stable prior to the HRRP, but significantly increased following its introduction.  A recent large analysis2 also demonstrated that the overall increase in mortality associated with the HRRP was mainly driven by patients who were not readmitted to the hospital, but who died within 30 days of discharge which enhances the likelihood of a causal relationship between the HRRP financially incentivized restricting of inpatient readmissions and the harm observed.

Irrespective of the policy’s intended outcomes, there remains no evidence that patients have benefited from the HRRP or more broadly penalising perceived inappropriate re-admission. How much good health can be sacrificed by Government in the pursuit of cost savings? As perverse as this question appears, it is presumably what American lawmakers are asking themselves. 

Who will they blame for the increased morbidity and mortality? Probably not themselves. I can imagine clinicians and institutions being disparaged. This recent US data brings into sharp focus whether re-admission rates are an accurate measure of hospital quality or a valid basis for financial penalty even if an equitable and appropriate system can be devised. Despite this, government’s remain entranced by the notion that re-admission rates are useful measures and offer a credible mechanism to drive quality improvements. 

By contrast, I would predict that targeted investment in general practice to facilitate chronic disease management, increased community-based services and mental health support resources and less crippling bed pressure in acute hospital with appropriate funding to rehabilitation/allied health to optimise patient function, would all achieve a great deal and might actually decrease mortality rates as well as reduce hospital re-admission.

The IHPA documents detailing the HAC system and how financial penalties will be applied is genuinely imposing with its intricacy – no doubt an actuarial triumph. But will it work? Is it no more valid than the misguided US experience with re-admission rates? 

Along hospital corridors I sense unintended consequences are expected to emerge from the HAC system and at the very least, there is a frustrating diversion of beleaguered hospital resources away from other potentially more useful pursuits. 

Diminished funding generates greater gaming behaviour whereas thoughtful, evidence-based investment will hopefully increase health outcomes. Too much ‘stick’ is never the answer and politically determined investment always fraught. The AMA remains a relatively lone voice of reason on these issues and our battle to persuade all Governments and others is far from done.



1.Fonarow Greg. Unintended harm associated with the Hospital Readmission reduction Program. JAMA 2018, 230(24): 2539-2541.

2.Wadhera RK et al.  Association of the Hospital Readmission Reduction Program with mortality among Medicare beneficiaries hospitalized for heart failure, acute myocardial infarction and pneumonia. JAMA 2018, 230(24): 2542-2552.


Published: 14 May 2019