{"id":3727,"date":"2014-12-20T16:36:45","date_gmt":"2014-12-20T21:36:45","guid":{"rendered":"http:\/\/www.khpi.org\/blog\/?p=3727"},"modified":"2015-01-19T20:53:06","modified_gmt":"2015-01-20T01:53:06","slug":"hospitals-penalized-by-medicare-for-excessive-hospital-acquired-conditions","status":"publish","type":"post","link":"http:\/\/www.khpi.org\/blog\/hospitals-penalized-by-medicare-for-excessive-hospital-acquired-conditions\/","title":{"rendered":"Hospitals Penalized by Medicare for Excessive Hospital-Acquired Conditions."},"content":{"rendered":"

I have been interested in attempts to measure the quality and safety<\/a> of healthcare since my year of fellowship on the Senate Finance Committee which\u00a0oversees the Medicare program. In the run-up to what would become Medicare\u2019s Hospital Compare program, a long list of things that might be measured was proposed. Most were set aside because of concerns about utility, comparability, reliability, difficulty of collection, or ability to be gamed. The shorter list evolved into the current iteration of Medicare\u2019s own Hospital Compare database that is incorporated into virtually every proprietary hospital rating system. The quality measurements are part of a new payment structure that hopes to pay for quality and value instead of volume alone.<\/p>\n

This month, the rubber hit the road. For an eligible\u00a03300\u00a0or so acute-care hospitals for which a score could be calculated, CMS released a composite score of the frequency of Hospital Acquired Conditions and infections (HAC). The 25% of hospitals with the worst HAC scores “are elligible”\u00a0have their total Medicare patient payments reduced by 1% beginning October, 2014. \u00a0For technical reasons only\u00a0724 hospitals (fewer than 25% of hospitals) actually received the penalty. Attached is a list of the elements<\/a> that are included in these actionable HAC scores. Note that some of the elements previously included in Hospital Compare such as retained object in surgery<\/a> have been left out, much to the distress\u00a0of some proprietary organizations. Infections resulting from intravenous lines and urinary catheters alone contribute to\u00a0the majority of the overall HAC score.<\/p>\n

I think the idea is great, I think the execution is difficult. Having examined\u00a0the quality and safety scores of Kentucky hospitals by different organizations over time, I am concerned that there is excessive lability of scores. Using essentially the same Medicare data with different twists, different proprietary agencies will give the same hospital different rankings (occasionally drastically so) at the same time. Conversely, the same organization might give the same hospital a different score over a relatively short period of time. I also have concerns about the reliability of self-reported data. Although I expected that objective measurements might differ from my own perceived evaluations of hospital quality, I was quite surprised at the magnitude. I was concerned about the financial implications to both hospital and rating organizations. Therefore, at\u00a0every opportunity over the last year, I shared my belief\u00a0with experts that available measures of quality and safety were not ready for prime time. I was told my concerns were reasonable.<\/p>\n

As I have done before, I extracted all the Kentucky hospitals from the national list in an attempt to get a manageable handle on the data. Attached is a list of Kentucky hospitals subject to penalties as ranked by their composite HAC score. Note that only 65 of our 100+ hospitals were vulnerable to the penalty. Some classes of hospitals such as standalone cancer, children’s hospitals, psychiatric hospitals, and others are\u00a0excluded nationally. Also excluded are\u00a0Medicare Critical Access Hospitals. These are small and mostly rural hospitals which are quite limited by statute as to what services they can provide. They are paid their costs plus 1%, nominally so that do not lose money on Medicare patients. CAH hospitals are not required to submit the same quality measurements to Medicare as other hospitals. God alone knows what happens there. There are some 30 CAH hospitals in Kentucky.<\/p>\n

Some\u00a03300\u00a0hospitals received\u00a0scores ranging from 1 to 10 with 1 being best. \u00a0There has been some confusion in initial media reports about the cutoff HAC score identifying hospitals that will have their total Medicare payments reduced. \u00a0Jordan Rau<\/a>, Senior Correspondent for Kaiser Health News,\u00a0has been reporting extensively on this program and was very helpful to\u00a0me. \u00a0It did not help that the key Medicare file listing the individual\u00a0penalized hospitals was unfindable by\u00a0me with out Rau’s help! \u00a0Further making analysis more difficult, the definitive Medicare file available so far\u00a0lists\u00a0hospitals by provider number, not by name. The short answer is that hospitals with a total HAC score greater than 7.0<\/span>\u00a0take the hit.<\/p>\n

Only 10 of the 65 Kentucky hospitals were penalized.\u00a0\u00a0Compared to the rest of the country, Kentucky did better. Our average score was 4.9, better than 5.5 nationally.\u00a0\u00a0Surprisingly, disappointingly, and even sadly, many if not most of Kentucky’s most prominent hospitals will be\u00a0penalized for alleged shortcomings in these measures of quality and safety! \u00a0See complete list of Kentucky hospitals<\/a>\u00a0with their scores here. [Addendum and\u00a0apology, Dec 23: For\u00a0the initial posting of this article, I drew from\u00a0a database\u00a0provided\u00a0by a prominent health-news organization that used an erroneous method of calculating the cutoff.\u00a0Two additional Kentucky Hospitals with scores of 7.0 were listed as receiving the penalty\u2013 Rockcastle County and Three Rivers. I apologize for erroneously including them in the initial version of the table below.]<\/p>\n

Louisville not a bright spot.
\n<\/strong>These are the Kentucky hospitals for which a 1% reduction in Medicare payments will be made at least until the next evaluation cycle.<\/p>\n

\"ky-hosp-penalty-2014\"<\/a><\/p>\n

In Louisville, our three major downtown hospitals\/systems had the worst scores in Kentucky. (Medicare does not distinguish the Norton Healthcare, or Jewish Hospital & St. Mary\u2019s Healthcare systems by their individual hospitals.) For perspective, a score of 9.35 or worse places a hospital among the poorest-rated 58 hospitals nationally, a score of 8.25 in the poorest 280, and a score of 7.675 with the poorest 474 hospitals. Even the Baptist Health hospitals that have done well in past rankings of quality escaped only by a whisker from being penalized. Both of Kentucky\u2019s university teaching hospitals were penalized. However, even\u00a0knowing these scores, I would personally have little trouble using some\u00a0of the penalized Kentucky hospitals as either a doctor or a patient. Is something wrong here?<\/p>\n

Is it fair?<\/strong>
\nReasonable questions of fairness are being asked. It is difficult to argue that things like bedsores, infected intravenous catheters, urinary catheters, or surgical infections are immaterial. It is argued (especially by those with poor scores) that large urban or teaching hospitals that care for populations of disadvantaged patients are being disadvantaged themselves. Will taking money away help make things better? On the other hand, it is also reasonable to ask if a lower standard of care for poor people or teaching patients should be acceptable in our society.<\/p>\n

Painful indeed.<\/strong>
\nAs Hannibal Lector said before he chopped off his hand\u2014 \u201cThis is going to hurt!\u201d Beginning with admissions in October 2014, 724\u00a0hospitals will have their total Medicare payments reduced by 1%. This may seem like a small amount, but most hospitals claim that even current payments do not cover the costs of caring for Medicare patients. According to the Medicare Payment Advisory Committee, the average hospital Medicare margin in 2012 for acute care hospitals was -5.4% for all hospitals, and -7.1% for nonprofits. If these numbers are justifiable, than all Medicare patients are financial losers for hospitals to begin with! Paradoxically, major teaching hospitals had margins of -2.6% compared to non-teaching hospitals at -7.2%. For-profit hospitals do \u201cbetter\u201d with a margin of +1.5%. Teaching hospitals are paid considerably more per patient than other hospitals because of bonuses for having residents, and for the higher rates of federal disproportionate care payments intended to offset losses for indigent care. [Not all disproportionate share payment rates are the same. Medicaid patients are worth more to some hospitals than others, a factor at the root of the claimed abuse of the 340B drug discount program, but that is a topic for another article!]<\/p>\n

But my hospital\u2019s patients are sicker and poorer!<\/strong>
\nAlthough it is asserted that the quality elements quantitated above have been adjusted for patient sickness, I also have my doubts about whether attempts to correct for severity of illness or nonmedical\/socioeconomic determinants of health are ready for general prime-time clinical application. (Similar arguments are offered about the wisdom of the new policy of penalizing hospitals with high readmission rates.) I had the opportunity to examine the database of one of the flagship quality and safety rating organizations on the condition that I not publish any of the data. I concluded that while many large urban or teaching hospitals were able to score well, I could not rule out that some were handicapped by things they could not control. In my opinion careful attention needs to be given to what we might be doing to institutions that are seeing patients that few other hospitals are eager or even willing to accept.<\/p>\n

You can already hear the howling in the streets.<\/strong>
\nSo what will hospitals do now? No doubt they will try to do better. It is clear that when efforts are made to focus on proper care of intravenous lines or urinary catheters, that infection rates can be brought very low, but they will never be eliminated altogether. Hospitals should be trying\u00a0anyway. It is troubling to contemplate that embarrassment or a financial club would be considered necessary to motivate hospitals and their staffs to do what is right or best. I do not think that is universally true. Most hospitals and their professional staffs want to do the right things. It cannot be denied however that some hospitals make it into the news for less noble aspirations. What will be depressing for hospital financial officers is the recognition that no matter how hard they try or how well they succeed, 25% of them will be penalized every year by the withholding of Medicare payments, the cost of which will inevitably be passed on to all of the hospital\u2019s patients. \u00a0Even more quality and outcome elements are scheduled to be added to the mix in the near future. Do we call this continuous quality improvement, or a regulatory treadmill? Will private payers follow Medicare’s payment lead or\u00a0use the HAC scores to assemble narrower networks?<\/p>\n

The take-away.<\/strong>
\nDoes this mean that Kentuckians should not go to any of the penalized hospitals for healthcare services? Of course not. In any case, in the age of narrow networks and high cost, most of us have little geographic or financial choice in the matter. \u00a0However, some of these hospitals have a lot of explaining to do. CMS itself needs to make a stronger case that all the regulation and paperwork makes a difference. If the scores are valid, then we have a clinical problem in Louisville and elsewhere. If the scoring system is flawed, then it needs to be scrapped. In my opinion, we are somewhere in between. All the above said, I still think that more transparency about clinical outcomes is justifiable and important. Indeed it is central to our efforts to evolve a better healthcare system.<\/p>\n

As always, if I have made an error of fact or you have\u00a0a better interpretation, let me know.<\/p>\n

Peter Hasselbacher, MD
\nPresident, KHPI
\nEmeritus Professor of Medicine, UofL
\nDecember 20, 2014<\/p>\n

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