Newswise — Every American hospital has two front doors: The real one, and an imaginary revolving door.

Any patient who winds up back in the hospital within a few weeks of getting out travels through that imaginary door. And the more of them there are, the more money their hospital stands to lose from the Medicare system.

This readmission penalty, as it’s called, aims to spur hospitals to prevent unnecessary costly care.

But a new study shows that after several years of rapid improvements in readmissions, the readmission penalty program may be spinning its wheels more than it’s slowing the spinning of the revolving hospital door. 

Writing in the journal Health Affairs, a team from the University of Michigan reports findings from their analysis of data from nearly 2.5 million Medicare patients. They focused on those who had hip or knee replacement surgery before and after penalties affecting these operations were announced.  

In fact, the study shows, the readmission rate for these patients had already started dropping by the time the idea of readmission penalties was announced as part of the Affordable Care Act in 2010.

Soon after that, the readmissions rate for these surgical patients started dropping faster—even though the penalties announced in the ACA did not apply to surgical patients.

The rate kept dropping rapidly for several years — even though hospitals weren’t getting penalized yet for hip and knee replacement-related readmissions.

But that improvement started to slow down.

After the government announced in late 2013 that penalties would expand to hip and knee replacement, the rate of readmissions for these patients kept dropping, but at nearly half the rate.

In other words, improvements in surgical readmissions slowed to the same trend they had before any penalties were announced in 2010.

“These findings raise the question of whether we’re about to reach the floor in our ability to reduce readmissions for these patients,” says Karan Chhabra, M.D., M.Sc., the study’s lead author.

Trends beyond readmissions

At the same time the readmission rates were changing, the average cost of caring for a Medicare hip or knee replacement patient did too, the new study shows.

In fact, it dropped by more than $3,000 from 2008 to 2016.

And hip and knee patients’ chance of heading home from the hospital, rather than to a skilled nursing facility or other setting, has increased over that time, the researchers report. So has the likelihood that they will have home health aide help when they get home. 

The same efforts that hospitals may have launched to prevent readmission of medical patients may have extended to these surgical patients, the authors speculate.

These might include care coordination programs and telephone check-ins with recently discharged patients, or better patient education about home care or changes to their medications.

Implications for expansion

The Hospital Readmission Reduction Program, or HRRP, still carries large penalties – up to 3% of what a hospital earns for certain Medicare patients. Not only that, it has expanded to include more conditions, including heart bypass surgery and more types of pneumonia including those with sepsis.

But Chhabra and his colleagues say that adding more conditions to the program is not likely to result in much more readmission prevention or cost savings.  

“Based on the experience so far, it’s hard to believe that adding on penalties for more conditions will further bend the curve of readmission,” says Chhabra, a National Clinician Scholar at the U-M Institute for Healthcare Policy and Innovation who is also a resident in the Department of Surgery at Brigham and Women’s Hospital.  

Recent research by other groups has suggested that non-surgical patients may actually be harmed by the drive to reduce readmissions, including being more likely to die at home. Safety net hospitals, which take care of poorer and sicker patients, are also penalized more often by the program.

Says Chhabra, “We may be approaching the point for these surgical patients where the unintended consequences of readmissions reduction efforts begin to dominate. When you’ve squeezed the possible benefits out, all you have left are harms.”

Potential alternatives

In the end, some readmissions are inevitable, the authors say, and trying to drive rates lower through penalties may mean some patients who should have been readmitted to deal with an issue won’t be.

Instead, the researchers suggest that more use of bundled payments – where Medicare sets a defined amount of money it will pay for the episode of care surrounding a surgical patient’s operation – could produce better results. This is because bundled payments ensure hospitals focus on costs and complications around the entire episode of care, not just one narrow metric like readmissions.

In the meantime, Chhabra says, patients who get hospitalized for surgery or any other reason should make sure to know what their lines of communication back to their care team at all hours after they leave the hospital.

Patients and the loved ones who will care for them should also make sure they understand the instructions they received at hospital discharge, and know what kinds of symptoms or changes should prompt them to contact their team. Often, their surgical teams can provide instructions or reassurance that can prevent a bounce back to the emergency department.

That kind of open communication can make the difference between an appropriate and an inappropriate rehospitalization.


In addition to Chhabra, the study’s authors are Andrew M. Ibrahim, MD M.Sc., Jyoth Thumma, MPH, Andrew M. Ryan PhD, and Justin B. Dimick MD, MPH. Ryan and Dimick are members of IHPI and co-directors of the Center for Healthcare Outcomes and Policy, with which all the authors are affiliated.


The study was funded in part by the National Institutes of Health (HS000053, AG39434). Dr. Chhabra is also funded by IHPI’s National Clinician Scholars Program, a fellowship program that supports early career clinicians seeking to improve healthcare through research and policy.


Reference: Health Affairs, July 2019, DOI:10.1377/hlthaff.2019.00096

Journal Link: Health Affairs, July 2019, DOI:10.1377/hlthaff.2019.00096