In the midst of weathering a $67 million decrease in Medicaid reimbursements, Yale-New Haven Hospital will face another 1.3 percent decrease in revenue, a result of failing to meet readmission rate standards for the fourth year in a row.
Though YNHH’s 1.3 percent reduction is the lowest relative penalty that the federal government levies against hospitals that have failed to meet readmission standards, the penalty will still cost the hospital millions of dollars. It comes after the closure of two Yale-New Haven Health System clinics, the upcoming consolidation of two urgent care centers and concerns that job vacancies will be left unfilled. Together, the state and federal payment reductions are squeezing the system’s already narrow profit margins.
Readmission rates are one of several measures, introduced by the 2010 Affordable Care Act, to compare quality of care at hospitals. Together with mortality rates and the prevalence of hospital acquired infections, the federal government penalizes hospitals that fare poorly by docking their Medicare reimbursement payments. But experts worry that readmission rates are a misled metric that penalize the hospitals caring for the sickest patients.
“We in the hospital world have a concern here that much of what is being neglected in these readmission rates is patient acuity,” said Thomas Balcezak, vice president for performance management and YNHH associate chief of staff. “We think this penalizes hospitals across the country that are caring for higher risk patients.”
According to Mary Cooper, chief quality officer at the Connecticut Hospital Association, readmission rates had been used to measure the quality of Connecticut hospitals long before the measure was included in the ACA.
Before the measure was put in place, hospitals could profit from high readmission rates, said Harlan Krumholz ’80, director of the YNHH Center for Outcomes Research & Evaluation. The measure works against that perverse incentive. Though hospitals were not trying to increase readmission rates before the legislation was passed, investing time and effort into reducing the rate made hospitals lose money, Krumholz said.
“In the old system, the economics created a negative incentive,” Krumholz said. “We thought that if we produce the measure and make it publicly reported, it would make the business case for people to invest in it.”
But according to Cooper, the patient mix in Connecticut’s 29 hospitals, 28 of which were penalized for high readmission rates, might actually make hospitals that care for a greater portion of high-risk patients more likely to be penalized.
Cooper said Connecticut has a high number of low-income areas, where access to primary healthcare can be limited. She said low-income patients also struggle to receive continuous care because medications in plans with high deductibles — which are growing in popularity — are more expensive. She said such patients are more likely to experience preventable readmissions, regardless of the hospital’s quality.
Yale Medical Group Chief Medical Officer Ronald Vender MED ’77 said that YNHH is a hospital that sees a lot of these such patients.
“YNHH is one of the most complex hospitals in the country and is dramatically different than a facility like the Hebrew Home,” Vender said, referring to the only Connecticut hospital that avoided the penalty. “That is like comparing Yale University to a community college in rural Iowa.”
Despite the opposition to the metric, measuring readmission does give hospitals incentive to improve, said Krumholz. YNHH in particular, he said, has made a good number of improvements. The hospital has created partnerships with community health centers, for instance, and has increased its focus on chronic health conditions, Cooper said.
As YNHH proceeds to outline its budget for the next fiscal year, administrators are thinking about what the numbers may mean for the hospital’s employees.
“We need to be fiscally responsible but we also have to be responsible to our employees,” Balcezak said. “Doing both together can be a challenge.”
Based in Connecticut, YNHHS also includes hospitals and health services in New York and Rhode Island.