How to convince doctors to reduce Medicare readmissions

What if cost cutting measures were put into place, but no one listened?

That’s the question cardiologist Sandeep Jauhar asks in a recent, excellent, New York Times essay. In the piece, he writes about the problem of Medicare readmissions, a significant cost driver. One of the ways to decrease the frequency is to financially reward hospitals that have low re-admission rates.

There’s one problem, however. Doctors don’t see much of money tied to that performance measure.

And that’s important, since it’s the physicians themselves, not hospital executives, who make the decision to admit a patient, or not.

Despite calls for doctors to be altruistic and “do the right thing,” nothing changes physician behaviors more than money. As it stands, there’s zero financial incentive for doctors to reduce their readmission rates. In fact, most doctors lose money by doing so.

Dr. Jauhar suggests sharing the reward:

Current law prohibits hospitals from paying doctors for reducing hospital services, even if the goal is to provide more efficient care. But such “gainsharing” will align doctors’ incentives with broader cost-cutting goals. Our system needs to provide inducements to decrease the amount of health care, especially with the current incentives that encourage rampant overutilization.

Align the financial motives of both doctors and hospitals, and there’s no doubt that results will follow.

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  • David Harlow

    Agreed. Having worked on a number of gainsharing and global billing CMS demos, I’ll second the motion: it is perhaps time for gainsharing to go mainstream so we don’t require special dispensation through demo projects or OIG opinions (which address anti-kickback, but not Stark issues, anyway). Since the demos have been specialty-specific, though, there is theoretical concern that unintended consequences may flow from implementing such an approach across the board, but I’m not buying it. Other thoughts on that front?

  • Classof65

    So you’re proposing that we pay doctors NOT to treat patients?

  • Dr. Jack Lewin

    Hospital readmissions are atop the most troubling issues facing our health care system. Approximately one in five patients hospitalized for a cardiac condition is readmitted within 30 days of discharge. In 2004, hospital readmissions cost Medicare a staggering $17.4 billion.

    The succession of hospital readmissions, however, is not without a cure. As Dr. Jauhar notes in the New York Times essay, there are ways in which many readmissions can be prevented. To address the problem, my colleagues and I at the American College of Cardiology recently announced our Hospital to Home (H2H) campaign – an effort to reduce the preventable heart failure and coronary artery disease readmissions by 20 percent over the next three years. The ACC will provide hospitals and practices with evidence-based strategies to improve the continuum of care. Whether it’s adhering to medications or following up with doctors, these strategies will ensure patients are properly educated before being discharged from the hospital.

    H2H is intentionally broad-based and inclusive, incorporating the viewpoints of patients and family caregivers, clinicians, integrated health systems, communities, policymakers and payers. To learn more about the ACC’s H2H campaign visit the Lewin Report at

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