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Hospitals Penalized for Sicker, Poorer Patients Not Poorer Quality of Care, Study Finds

To what extent are differences in hospital readmission rates explained by measurable patient characteristics not used by Medicare to adjust for risk of readmissions in pay-for-performance programs?  An observational study, published in JAMA, of Medicare claims and US Census data found that adjustment for additional clinical and social variables reduced overall hospital variation in readmission rates by 9.6%, narrowed differences in rates between hospitals serving higher vs lower proportions of high-risk Medicare patients by 54%, and reduced expected penalties by 41% among the 10% of hospitals with the largest penalty reductions.  Implications for Pay-for-Performance: hospitals are penalized to some extent for serving sicker and poorer patients rather than for poorer quality of care, which highlights the need for improved risk adjustment in pay-for-performance programs.

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