ObamaCare’s Death Payments A program to reduce hospital admissions may have led to more deaths.
https://www.wsj.com/articles/obamacares-death-payments-1511465449
ObamaCare has caused hard-to-quantify economic damage, but some of the law’s regulations may be lethal—literally. Consider a Medicare hospital payment initiative, which a new study in the Journal of the American Medical Association Cardiology suggests may have contributed to an increase in deaths.
Readers are likely familiar with ObamaCare’s mandate and subsidies to impel individuals to obtain health insurance. But the law also included monetary incentives and penalties aimed at inducing changes in health-care delivery and spending reductions. The government rolled out these payment models nationally without careful study, and they are having unintended side effects.
A case in point is the Hospital Readmissions Reduction Program, which penalizes hospitals with above-average readmissions for Medicare patients. Readmissions are expensive, and the goal of the penalties is to encourage providers to take measures that reduce repeat hospitalizations—for instance, providing patients with clearer discharge instructions and coordinating with primary-care physicians.
Hospitals are graded on a curve and dunned if their 30-day readmission rate exceeds the national average. Hospitals can thus be penalized even if they reduce readmissions. The penalties, which are assessed as a share of hospitals’ Medicare payments, have been applied to an increasing number of medical conditions including knee and hip replacements.
Liberals have touted data showing that readmissions have fallen since the penalties took effect in 2013, but the JAMA researchers examined whether quality of care has improved as a result. Their observational study examined 115,245 fee-for-service Medicare beneficiaries hospitalized with heart failure across the U.S. in the four years prior to and first two years following implementation of the program.
Researchers found that the 30-day readmission rate (adjusted for patient risk) declined to 18.4% from 20% after the penalties were introduced. Yet the 30-day mortality rate increased to 8.6% from 7.2%—about 5,400 additional deaths per year. Over a one-year period the readmission rate fell by 0.9 percentage points while the mortality rate rose by five. In other words, while fewer patients were being readmitted, many more were dying.
The researchers hypothesize that the penalties might “incentivize hospitals to ‘game’ the system, using strategies such as delaying admissions beyond day 30, increasing observation stays, or shifting inpatient-type care to emergency departments.” These tricks may end up hurting patients.
Hospitals with above-average readmissions are also more likely to care for low-income patients and deal with complicated medical cases. They are usually financially strapped due to low Medicaid reimbursements, and the ObamaCare penalties may make it even harder to deliver quality care.
ObamaCare effectively enrolled Medicare patients and hospitals without their consent in a mandatory policy experiment—you’ll be better off, trust us—but then neglected to evaluate the adverse effects. A drug trial with the same results would have been shut down long ago.
The JAMA researchers conclude that, “like drugs and devices, public health policies should be tested in a rigorous fashion—most preferably in randomized trials—before their widespread adoption.” Sounds like good advice, but not the sort that ObamaCare architects and masters of the economic-planning universe like Peter Orszag and Jonathan Gruber are inclined to take.
The Trump Administration is seeking to redesign some of ObamaCare’s payment programs, including making policy experiments voluntary for providers. This has caused a fury among those on the left who believe that government coercion is the cure for all health-care maladies. Testing incentives on a small scale could prevent untold economic harm and deaths.
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