Hospital Readmissions Reduction Program Does Not Provide the Right Incentives: Issues and Remedies

References

• Adida E , Bravo F (2019) Contracts for healthcare referral services: Coordination via outcome-based penalty contracts. Management Sci. 65(3):1322–1341.Link, Google Scholar
• Adida E , Mamani H , Nassiri S (2016) Bundled payment vs. fee-for-service: Impact of payment scheme on performance. Management Sci. 63(5):1606–1624.Link, Google Scholar
• Altman SH (2012) The lessons of Medicare’s prospective payment system show that the bundled payment program faces challenges. Health Affairs 31(9):1923–1930.Crossref, Google Scholar
• Andritsos DA , Tang CS (2018) Incentive programs for reducing readmissions when patient care is co-produced. Production Oper. Management 27(6):999–1020.Crossref, Google Scholar
• Armstrong M , Sappington DE (2007) Recent developments in the theory of regulation. Armstrong M , Porter RH , eds. Handbook of Industrial Organization , vol. 3 (Elsevier, Amsterdam), 1557–1700.Google Scholar
• Aswani A , Shen ZM , Siddiq A (2016) Data-driven incentive design in the Medicare shared savings program. Technical report, University of California, Berkeley, Berkeley.Google Scholar
• Ata B , Killaly BL , Olsen TL , Parker RP (2013) On hospice operations under Medicare reimbursement policies. Management Sci. 59(5):1027–1044.Link, Google Scholar
• Baggot D , Edeburn A (2015) Mandated bundled payments compel hospitals to rethink post-acute care. Healthcare Financial Management 69(10):64–69.Google Scholar
• Barnett M , Hsu J , McWilliams J (2015) Patient characteristics and differences in hospital readmission rates. JAMA Internal Medicine 175(11):1803–1812.Crossref, Google Scholar
• Bastani H , Bayati M , Braverman M , Gummadi R , Johari R (2016) Analysis of Medicare pay-for-performance contracts. Preprint, submitted September 16, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2839143.Google Scholar
• Batt RJ , Bavafa H , Soltani M (2018a) Quality improvement spillovers: Evidence from the hospital readmissions reduction program. Preprint, submitted March 4, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3132770.Google Scholar
• Batt RJ , Bavafa H , Soltani M (2018b) Quality improvement spillovers: Evidence from the hospital readmissions reduction program. Technical report, University of Wisconsin, Madison.Google Scholar
• Bavafa H , Savin S , Terwiesch C (2017) Redesigning primary care delivery: Customized office revisit intervals and e-visits. Technical report, University of Wisconsin, Madison.Google Scholar
• Burgess JF , Hockenberry JM (2014) Can all cause readmission policy improve quality or lower expenditures? A historical perspective on current initiatives. Health Econom. Policy Law 9(2):193–213.Crossref, Google Scholar
• Campbell D (2017) NHS bosses sound alarm over hospitals already running at 99% capacity. The Guardian (December 7), https://www.theguardian.com/society/2017/dec/07/nhs-bosses-sound-alarm-over-hospital-bed-shortages-patient-safety-concern.Google Scholar
• Chalkley M , Malcomson JM (1998) Contracting for health services with unmonitored quality. Econom. J. 108(449):1093–1110.Google Scholar
• Chen C , Savva N (2018) Unintended consequences of hospital regulation: The case of the Hospital Readmissions Reduction Program. Technical report, London Business School, London.Google Scholar
• Chen M , Grabowski DC (2019) Hospital readmissions reduction program: Intended and unintended effects. Medical Care Res. Rev. 76(5):643–660.Crossref, Google Scholar
• CMS (2017) New stratified methodology hospital-level impact file user guide. Accessed August 12, 2018, https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/HRRP_StratMethod_ImpctFile_UG.PDF.Google Scholar
• CMS (2019) Acute care hospital inpatient prospective payment system. Accessed August 8, 2019, https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/AcutePaymtSysfctsht.pdf.Google Scholar
• Desai NR , Ross JS , Kwon JY , Herrin J , Dharmarajan K , Bernheim SM , Krumholz HM , Horwitz LI (2016) 12). Association between hospital penalty status under the Hospital Readmission Reduction Program and readmission rates for target and nontarget conditions. JAMA 316(24):2647–2656.Crossref, Google Scholar
• Eijkenaar F , Emmert M , Scheppach M , Schöffski O (2013) Effects of pay for performance in healthcare: A systematic review of systematic reviews. Health Policy 110(2–3):115–130.Crossref, Google Scholar
• Fudenberg D , Tirole J (1991) Game Theory (MIT Press, Cambridge, MA).Google Scholar
• Gruessner V (2016) CMS includes rich history of healthcare bundled payments. Accessed October 3, 2018, https://healthpayerintelligence.com/news/cms-includes-rich-history-of-healthcare-bundled-payments.Google Scholar
• Guo P , Tang CS , Wang Y , Zhao M (2019) The impact of reimbursement policy on social welfare, revisit rate, and waiting time in a public healthcare system: Fee-for-service vs. bundled payment. Manufacturing Service Oper. Management 21(1):154–170.Link, Google Scholar
• Gupta D , Mehrotra M (2015) Bundled payments for healthcare services: Proposer selection and information sharing. Oper. Res. 63(4):772–788.Link, Google Scholar
• Hansen LO , Young RS , Hinami K , Leung A , Williams MV (2011) Interventions to reduce 30-day rehospitalization: A systematic review. Ann. Internal Medicine 155(8):520–528.Crossref, Google Scholar
• Harsanyi JC (1973) Games with randomly disturbed payoffs: A new rationale for mixed-strategy equilibrium points. Internat. J. Game Theory 2(1):1–23.Crossref, Google Scholar
• James J (2013) Medicare Hospital Readmissions Reduction Program. Health Affairs (November 12), https://www.healthaffairs.org/do/10.1377/hpb20131112.646839/full/healthpolicybrief_102.pdf.Google Scholar
• Jencks SF , Williams MV , Coleman EA (2009) Rehospitalizations among patients in the Medicare fee-for-service program. New England J. Medicine 360(14):1418–1428.Crossref, Google Scholar
• Jiang H , Pang Z , Savin S (2012) Performance-based contracts for outpatient medical services. Manufacturing Service Oper. Management 14(4):654–669.Link, Google Scholar
• Joynt KE , Figueroa J , Oray J , Jha AK (2016) Opinions on the hospital readmission reduction program: Results of a national survey of hospital leaders. Amer. J. Management Care 22(8):e287–e294.Google Scholar
• Kristensen SR , Bech M , Quentin W (2015) A roadmap for comparing readmission policies with application to Denmark, England, Germany and the United States. Health Policy 119(3):264–273.Crossref, Google Scholar
• Laffont JJ , Tirole J (1993) A Theory of Incentives in Procurement and Regulation (MIT Press, Cambridge, MA).Google Scholar
• Lanièce I , Couturier P , Dramé M , Gavazzi G , Lehman S , Jolly D , Voisin T , et al. . (2008) Incidence and main factors associated with early unplanned hospital readmission among French medical inpatients aged 75 and over admitted through emergency units. Age Ageing 37(4):416–422.Crossref, Google Scholar
• Ma CA (1994) Healthcare payment systems: Cost and quality incentives. J. Econom. Management Strategy 3(1):93–112.Crossref, Google Scholar
• Mechanic R , Tompkins C (2012) Lessons learned preparing for Medicare bundled payments. New England J. Medicine 367(20):1873–1875.Crossref, Google Scholar
• MedPAC (2013) Report to Congress: Medicare and the healthcare delivery system. Chapter 4: Refining the hospital readmissions reduction program. Accessed August 16, 2019, http://www.medpac.gov/docs/default-source/reports/jun13_ch04.pdf.Google Scholar
• Mellor J , Daly M , Smith M (2017) Does it pay to penalize hospitals for excess readmissions? intended and unintended consequences of Medicare’s hospital readmissions reductions program. Health Econom. 8(26):1037–1051.Crossref, Google Scholar
• Monette M (2012) 09). Hospital readmission rates under the microscope. Canadian Medical Assoc. J. 184(12):e651–e652.Crossref, Google Scholar
• Ody C , Msall L , Dafny L , Grabowski D , Cutler D (2019) 1). Decreases in readmissions credited to Medicare’s program to reduce hospital readmissions have been overstated. Health Affairs 38(1):36–43.Crossref, Google Scholar
• Osborne MJ , Rubinstein A (1994) A Course in Game Theory (MIT Press, Cambridge, MA).Google Scholar
• Pope GC (1989) Hospital nonprice competition and Medicare reimbursement policy. J. Health Econom. 8(2):147–172.Crossref, Google Scholar
• Porter ME , Kaplan RS (2016) How to pay for healthcare. Harvard Bus. Rev. 94(7/8):88–100.Google Scholar
• Robinson P (2010) Hospitals readmissions and the 30 day threshold. Accessed October 3, 2018, http://www.chks.co.uk/userfiles/files/CHKS\%20Report\%20Hospital\%20readmissions.pdf.Google Scholar
• Samsky MD , Ambrosy AP , Youngson E , Liang L , Kaul P , Hernandez AF , Peterson ED , McAlister FA (2019) 05). Trends in readmissions and length of stay for patients hospitalized with heart failure in Canada and the United States. JAMA Cardiology 4(5):444–453.Crossref, Google Scholar
• Savva N , Tezcan T , Yildiz Ö (2019) Can yardstick competition reduce waiting times? Management Sci. 65(7):3196–3215.Google Scholar
• Shleifer A (1985) A theory of yardstick competition. RAND J. Econom. 16(3):319–327.Crossref, Google Scholar
• So KC , Tang CS (2000) Modeling the impact of an outcome-oriented reimbursement policy on clinic, patients, and pharmaceutical firms. Management Sci. 46(7):875–892.Link, Google Scholar
• Struijs JN (2015) How bundled healthcare payments are working in the Netherlands. Harvard Bus. Rev. (October 12), https://hbr.org/2015/10/how-bundled-health-care-payments-are-working-in-the-netherlands.Google Scholar
• Tangerås TP (2009) Yardstick competition and quality. J. Econom. Management Strategy 18(2):589–613.Crossref, Google Scholar
• Uscher-Pines L , Pines J , Kellermann A , Gillen E , Mehrotra A (2013) Deciding to visit the emergency department for non-urgent conditions: A systematic review of the literature. Amer. J. Management Care 19(1):47–59.Google Scholar
• van Damme E (1983) Refinements of the Nash Equilibrium Concept , Lecture Notes in Economics and Mathematical Systems, vol. 219 (Springer-Verlag, Berlin, Heidelberg).Crossref, Google Scholar
• Viberg N , Forsberg BC , Borowitz M , Molin R (2013) International comparisons of waiting times in healthcare—Limitations and prospects. Health Policy 112(1):53–61.Crossref, Google Scholar
• Wasfy JH , Zigler CM , Choirat C , Wang Y , Dominici F , Yeh RW (2017) Readmission rates after passage of the hospital readmissions reduction program: A pre–post analysis. Ann. Internal Medicine 166(5):324–331.Crossref, Google Scholar
• Zhang DJ , Gurvich I , Van Mieghem JA , Park E , Young RS , Williams MV (2016) Hospital Readmissions Reduction Program an economic and operational analysis. Management Sci. 62(11):3351–3371.Link, Google Scholar
• Ziedan E (2018) The intended and unintended consequences of the hospital readmission reduction program. Technical report, Tulane University, New Orleans.Google Scholar
• Zorc S , Chick SE , Hasija S (2017) Outcomes-based reimbursement policies for chronic care pathways. Technical report, INSEAD, Fontainebleau, France.Google Scholar
• Zuckerman RB , Sheingold SH , Orav EJ , Ruhter J , Epstein AM (2016) Readmissions, observation, and the hospital readmissions reduction program. New England J. Medicine 374(16):1543–1551.Crossref, Google Scholar