Evaluating the Medicare Hospital Readmissions Reduction Program
Encinosa, William E
The Affordable Care Act (ACA) introduced numerous health care delivery reforms that aim to improve the quality of care while restraining its costs. This study uses AHRQ HCUP NJ hospitals' patient-level utilization data to evaluate the Hospital Readmissions Reduction Program (HRRP), which established a penalty for hospitals that, from July 2009 through June 2012, had Medicare risk-adjusted readmission rates that exceeded national mean rates for three conditions: acute myocardial infarction (AMI), heart failure (HF), and pneumonia (PN). By using Regression Discontinuity Design, this study sets out to isolate the program's hypothesized effect of reducing the probability of a readmission and to distinguish it from interventions in post-acute care settings.My findings suggest that, in HRRP's first year of implementation, the PN measure-based penalty is associated with a 5.3 percentage point decrease in the probability of a readmission for patients suffering from PN, the HF measure-based penalty is associated with a 8.5 percentage point decrease in the probability of a readmission for patients suffering from HF, and there is no statistically significant association between HRRP's AMI measure-based penalty and the probability of a readmission for patients suffering from AMI. Due to some data limitations, along with evidence pointing to some systematic differences in unobservable characteristics just below and just above the policy cutoff, the results do not warrant causal interpretations. Nevertheless, if confirmed by future research, the evidence suggests that policymakers should consider the possibility that targeted hospital payment incentives are worthy complements to health care quality improvement efforts that follow hospital discharge.
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