Old-Fashioned Heuristics: Common Sense Cause and Effect

Regarding the countless examples of reckless government spending we like to mock, I stopped caring a long time ago. Instead, I have turned my attention to the funding of studies designed to confirm things that we should have already known.

If you have a sense of humor, there are numerous ridiculous examples where taxpayer money might have been invested more judiciously. Spending more than a billion to confirm that the use of seat belts saves lives comes to mind, as does funding a long-term study to determine whether obligatory handwashing might be a good idea in health care settings.

Studying hospital behavior to determine if they might be playing self-serving games with the current reimbursement calculus also strikes a chord.

The Hospital Readmission Reduction Program (HRRP), part of the Affordable Care Act (ACA), was established in 2010. It penalizes hospitals for higher-than-expected rates of readmission (within 30 days for Medicare patients with heart attack, heart failure or pneumonia). Its original intent, however, is to penalize hospitals across a broader spectrum of preventable patient readmissions (e.g., to not pay for a hospital-acquired infection).

Previous research on the HRRP program showed readmission rates began to fall in 2012 and have continued to drop, suggesting that the interventions hospitals put in place to improve care quality were working. But University of Michigan researchers found an increase in the coding of secondary diagnoses after the HRRP was initiated, which impacted risk-adjusted coding severity. The number of coded secondary diagnoses increased by 20% at control hospitals, but went up by 39% at hospitals subject to the HRRP.

The researchers said it's hard to know how much their results reflect efforts to “game” the system by altering coded-severity or represent a real increase in the severity of patients.

"Risk-adjustment is a common and necessary practice. However, because risk is determined by providers' coding practices, it has the potential to be manipulated." said Andrew Ryan, associate professor of health management and policy at the University of Michigan School of Public Health. "It is possible that hospitals exposed to the HRRP under-coded severity prior to the HRRP, rather than over-coding severity after the program. Nonetheless, there is a long history of health care providers and health plans, increasing the coded severity of patients when it is to their advantage to do so."

In layman’s terms, certain hospitals immediately began covering their rear-ends, and in some cases, patient care quality improved. In other cases, however, hospitals were revealed as willing to jury-rig their coding practices (what’s in a name?) to increase procedural costs or avoid responsibility for what might otherwise be an uncompensated patient readmission.

Maybe I’ve got it wrong? Surely the framers of the ACA understood that struggling hospitals faced with already falling reimbursements would be motivated to avoid further penalties. But how many studies will be required to confirm such obvious cause and effect?

The research team looked at 6,302,389 admissions from 2008 to 2014 at 3,259 hospitals subject to HRRP and 1,115 control hospitals.

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