Hospital readmissions and length of stay

The following is a guest post by Jennifer Gilbert, a Clinical Research Coordinator at Massachusetts General Hospital. She graduated from Boston University in 2014. You can follow her on Twitter: @jenmgilbert.

Since the introduction of Medicare’s prospective payment system (PPS) in 1983, which pays hospitals a fixed price per admission diagnosis, U.S. hospitals have been financially incentivized to reduce inpatient length of stay (LOS). Consequently, average LOS has decreased dramatically according to studies of the National Hospital Discharge Survey. Despite average patient age and complexity increasing, the average LOS has dropped from 7.3 days in 1980 to 4.8 days in 2003.

One could imagine that the financial pressures to reduce LOS could lead to poorer patient outcomes, but past studies have shown mixed data on whether the two are correlated.

Shorter LOS has been associated with higher risk of readmission (more on this below), and mortality resulting from pulmonary embolism complications, though not with harm associated with AMI (acute myocardial infarction) or CABG (coronary artery bypass graft). Unfortunately, many of these studies have been confounded by patient-level factors, particularly severity of disease—sicker patients tend to stay longer in the hospital, which can be difficult to separate statistically from any potential adverse effects of a shorter LOS.

The study mentioned above by Southern et al. controlled for these patient-level factors and found that short LOS was significantly correlated with all-cause 30-day mortality. Researchers compared mortality rates at a single medical center for admitted patients who were assigned to physicians that tended to have long versus short LOS admissions. In a sample of over 12,000 admissions, patients receiving care from short LOS physicians had a significantly increased risk of 30-day mortality relative to propensity-score matched patients receiving care from long LOS physicians. This suggests that policies incentivizing shorter lengths of stay may be associated with worse patient outcomes.

Shorter LOS has also been correlated with a significantly higher risk of readmissions in multiple studies, including a study of LOS in Norway and another comparing 27 different countries. Similarly, studies of patient outcomes suggest an increase in readmissions following the implementation of PPS.

Importantly, there is a tradeoff between the additional cost for each additional day of a hospital stay and the cost of any readmissions that might be the result of a shortened one. A cost-savings study by Dr. Kathleen Carey found that some of the cost of an additional day of stay for a heart attack patient would be offset by the expected cost savings. Though her estimate of the offset varies (due to different model specifications) she found that 15%-65% of the cost of an additional day of stay is effectively avoided by a reduction in the risk of readmission.

Dr. Carey’s study accounts for the comparison of cost without factoring in outside readmissions penalties from government programs. However, the Hospital Readmissions Reduction Program (HRRP) and Shared Savings program could be tipping the scales toward longer LOS by adding different payment incentives. Hospital leaders may be faced with a new calculus as increasing financial pressures are put in place to reduce readmissions.

CMS uses a variety of payment programs to incentivize hospitals to reduce readmissions, which may offset the financial incentives to reduce LOS even further. In the HRRP, hospitals can now lose up to 3% of their Medicare payments for high rates of 30-day readmissions for patients with one of five conditions (chronic heart failure, heart attack, pneumonia, chronic lung problems, and elective hip or knee replacements). In the first year alone, over 2000 hospitals received penalties, costing an average of $125,000 per hospital.

The Shared Savings program, or Pioneer ACO program, pushes ACOs to reduce their readmissions by allowing them to share the savings they create by lowering readmissions. They are also penalized if their readmissions rate rises above what CMS predicts. This incentivizes hospitals to coordinate care and lower readmissions.

Another program, the Bundled Payments for Care Improvement (BPCI) Initiative, financially incentivizes hospitals to coordinate care. Hospitals are given a set amount of money for episodes of hospitalization that fit into one of the four BPCI payment models, and then use this sum of money as efficiently as possible to care for the patient. This links the payment for multiple services that a beneficiary might receive during an episode in each of the four circumstances, and supports less fragmented care efforts. If another day of stay predictably offsets the cost of a readmission, this should lead to increasing LOS.

It is worth mentioning that readmissions rate is a very complex quality metric, and does not catch all of the nuances in care. Hospitals can “game the system” and artificially lower their readmissions rate by placing many patients under observational status. These visits are technically considered outpatient, and thus do not count as hospital readmissions. However, their care is often indistinguishable from inpatient care.

This is also true of Emergency Department (ED) visits—patients who are treated in the ED when they return to the hospital, but not ultimately readmitted, do not affect the statistic. A study in Annals of Emergency Medicine found that over 50% of returns to the hospital from January to June of 2010 did not result in an admission, and thus did not contribute to the hospital’s readmissions rates.

Since the HRRP began, there has been an increase in observational status along with a decrease in readmissions. These factors may make the link between LOS and readmissions rate more challenging to unravel. However, a recent study in Health Affairs that looked into this phenomenon found that, at least in New York from 2008-2012, the expansion of HRRP in general did not lead to many of the unintended consequences above.

Depending on the relative costs of an additional hospital day versus the costs of a readmission plus any penalty for it under the new programs described above, it may become cost-effective to increase LOS, countering PPS’s incentive to decrease it. To my knowledge, there have not been any studies examining whether LOS has increased as readmissions rates have decreased in recent years.

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