Since hospitals do not already have enough of a disincentive to take Medicare patients…

…the brilliant federal government decided to impose penalties on the ones who take the sickest and oldest patients*.

Under an ObamaCare regulation, hospitals with high readmission rates (patients who are readmitted within thirty days of being released) will be docked on their already too-low Medicare reimbursements. In theory, this is meant to encourage hospitals to provide high-quality care and to reduce costly readmissions, which result in $17.5 billion in spending every year.

It is questionable whether this will actually save any money, and may simply result in more medical spending.  Rather than release a patient who is ready to go home, a hospital may keep that person in its care – at the cost of thousands of dollars a day to the government.  Likewise, one of the largest drivers of costs in American medicine is defensive medicine, in which doctors do things that are not strictly necessary or even helpful, but intended to stave off the threat of litigation.  This regulation will only increase that incentive.

Those who are serious about ensuring that doctors give high-quality medical care to Medicare patients their first time through the hospital should look to altering the very high denial of claims rate: Medicare is twice as likely as a private insurer to deny recommended medical treatment.

This is absurd in light of ObamaCare’s implementation of an Independent Payment Advisory Board, which will issue recommendations on how to reduce Medicare spending.  The $17.5 billion spent on readmission pales in comparison to the cost of Medicare ($7.7 trillion in ten years, according to the CBO).  The logical result of this is to squeeze doctors from both sides: to refuse treatments that could prevent readmission, then reduce reimbursement when the inevitable readmissions result.


*Ab obligatory “balancing the budget via death panels” joke is in order: after all, if hospitals have less of an incentive to treat the old and the sick, we’ll all save money, right?  I jest.  Morbid humour and all.


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Filed under Economics, Medicare/Medicaid, ObamaCare

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