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Medicare: Obamacare Helped Hospital Patients

Obamacare has significantly lowered the rate for re-admission of Medicare patients in hospitals

Whenever we receive treatment at the hospital, we can’t wait to leave and hope we don’t have to go back anytime soon. That of course assumes we’ve recovered from our illness or surgery and taken care of health issues before they worsened. The latest numbers coming out of the Centers for Medicare and Medicaid Services shows that may be the case. It announced that on a national basis, the rate for re-admission of Medicare patients to hospitals after 30 days is declining sharply.

A study released in 2013 by CMS showed that between 2007 and 2011, the national 30-day hospital re-admission rate averaged 19 percent. In 2012, it averaged 18.4 percent or a reduction of about 70,000. Hopefully, that means patients are getting better care than they were before, and that’s caused the decline in re-admission rates. Some people, however, are reserving judgment on that observation for now.

What has caused the decline now when re-admission rates were typically 20 percent for so many years?

Some attribute the change to Obamacare and how the new law has implemented financial penalties for hospitals that do a poor job of keeping Medicare patients from returning to their hospital for treatment. That’s the position of CMS officials, and it makes sense because hospitals have an incentive to better oversee care the first time and avoid any re-admitting of patients. Those penalties went into effect in 2012, and CMS says the re-admission rates began declining that year and again in 2013. Officials say they continue to fall this year as well.

Those penalties paid by more than 2,200 hospitals amounted to about $280 million in the fiscal year that ended Sept. 30, 2013. The CMS projects by the end of this fiscal year in September, the amount of fines could drop to less than $230 million.

Savings are important to Medicare whose hospital trust fund is solvent only through 2026. Re-admissions cost Medicare more than $25 billion a year, and federal officials say about two-thirds of those expenditures should be avoided. But does this decline mean hospitals are doing a better job? There’s no doubt some are, but some hospitals could also be playing with their numbers to avoid penalties.

Some suggest Medicare patients aren’t being charged through Medicare and the hospital is absorbing those costs. That may include treatment in emergency rooms or patients admitted for observation.

Another possibility for why the re-admission rates have declined is that more beneficiaries are receiving post-discharge care through emergency departments, observational stays or other non-inpatient settings without material improvements in quality of care,” CMS says in its study.

CMS says hospitals’ strategies to reduce re-admissions have included better patient education, more follow-up after they’re discharged and better coordination with outpatient providers—which happens to be part of the mission of the Affordable Care Act or Obamacare.

Of the 306 hospital regions across the country, the re-admission rates dropped between 1 and 5 percent in 166 of them. Rates dropped more than 5 percent in 73 of the hospital regions. The Longview, TX, region had the steepest decline. Rates increased by more than 1 percent in 30 of the 306 regions. Bloomington, IL, had the largest increase, CMS says.

CMS says it’s difficult to compare rates between regions because they’re affected by demographic characteristics and the types of disease treated among patients in different areas. The biggest factor in determining rates is that they’re lower at small hospitals and higher at larger ones.

That doesn’t mean that smaller, more rural hospitals lead to lower re-admission rates,” the CMS says in its study. “Differences in re-admission rates can exist for a variety of reasons, including patient demographics and the risk profile of the patient population.”

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