American Journal of Law & Medicine

Healing Medicare hospital recidivism: causes and cures.


The role of Medicare in our national market for acute care hospital services is that of a power buyer. Medicare beneficiaries in 2008 included some 45.2 million people. Total benefits paid in 2008 were $462 billion, (1) including 29% of all hospital spending. (2) Medicare's dominance in the buyer's market for acute care hospital beds renders the program particularly well-suited to scrutinize the role of acute care hospital services in producing effective and efficient outcomes for Medicare beneficiaries. "[I]f there are to be far-reaching changes in the way medicine is practiced in this country, Medicare will have to drive them." (3) It is a historical irony that a program, a scaled-down version of national health insurance, could have grown to this power buyer status; but the history of Medicare is full of ironies--the greatest of which may prove to be that Medicare reforms now sit at the very center of the funding mechanisms for the 2010 Patient Protection and Affordable Care Act (PPACA).

Medicare Hospital Insurance, now known as Medicare Part A, was originally designed as a hospital inpatient insurance program. This fact demonstrates both the power of physician resistance to the inclusion of physicians' services and the fact that, in 1965, the greatest fear for the aged uninsured was a lack of insurance for inpatient medical services. (4) Original Medicare shaped itself to accommodate the payment system norms of the private insurance industry (5) and the power of providers. Medicare's pre-passage scope was expanded to include voluntary subsidized insurance as Part B's coverage for physicians' office visits. The program re-design acknowledged the trend toward receipt of increasing numbers of health care services in outpatient settings as well as a change of heart for the American Medical Association.

Part B coverage was added on to Part A coverage, not synthesized with it. Perhaps because Medicare, in its origins, divided provider reimbursement by the venue in which the service was provided, the conceptual divide between inpatient and outpatient services entrenched a model of health care delivery for Medicare beneficiaries that contemplated and reinforced a sharp break between inpatient services and outpatient services. This system design distinction in turn shaped the future development of services in both of these venues. The observation that Medicare's reimbursement structure drives the shape of its delivery structure is particularly trenchant when applied to Medicare's role in failed hospital discharges. It is at this intersection of Part A and Part B where so much is lost. The cost in human life, human suffering, and health care dollars of the continued legacy of disjointed Part A and Part B services is made manifest. Medicare's failure to fund comprehensive acute care hospital discharge planning and services is the legacy.

Medicare acute care hospital discharge planning is often seen as offering purely clinical, financial, or legal challenges. But in reality the re-engineering of Medicare acute care hospital discharge planning requires overcoming all three: it is a legal, a financial, and a clinical delivery challenge of the utmost importance. With nearly one-fifth of Medicare patients readmitted to a hospital within thirty days of discharge, (6) the failure of discharge and of discharge planning is multi-dimensional. (7) It represents both a financial disaster for the Medicare program and an exacting burden that extracts a high personal toll on Medicare beneficiaries.

Part of the cause of the rise in Medicare hospital recidivism is found in the broader revolution in acute care medical procedures which have brought "sicker and quicker" acute care hospital discharges within the realm of the imaginable. But it took the reformation of Medicare's reimbursement practices--especially the introduction of Medicare's prospective payment system and the rise of utilization review--to drive acute care hospital discharge planning to its current state. Contemporary Medicare hospital discharge planning's dangerous, expensive and oddly truncated emphasis on acute care utilization review averts attention from promoting successful reentry into the pre-acute care environment for the patient.

This paper attempts to account for the history, source, and magnitude of the preventable readmissions and acute care discharge planning problems for Medicare. (8) How did we get where we are? And how--through financial, clinical practice, and legal reforms--might we get out? What are the most promising proposals for reform?

This paper starts with the histories of hospital discharge practices and of acute care hospital utilization and then traces the development of an acute care hospital discharge practice at the Boston Psychopathic Hospital in the early nineteenth century. Well into the twentieth century, the dominant model was for patients to experience their general acute care illnesses at their homes. Alongside this model, however, a different hospitalization and post-hospitalization model had grown up in an attempt to mediate the relationships between the hospital, the family, and other social service institutions outside the hospital: the one developed for chronically-ill mental-health patients.

General acute care hospitals reinvented themselves in the second half of the twentieth century. They became increasingly dependent on government funded health programs. And so acute care discharge planning in the Medicare context turned into a reimbursement no man's land, mandated by Medicare's "Conditions of Participation" requirements, but unfunded. Simultaneously tethered to the hospital by a backward-looking historical mission and by managed care's backward-looking demand for utilization review, Medicare acute care discharge planning developed a backward-looking orientation. The introduction, in the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA), of Medicare's "Inpatient Prospective Payment System Diagnosis Related Groups" (9) combined with the rise of managed care to create the forces that changed acute care hospital discharge planning from a mere value-added service to an essential institutional survival technique.

This paper then considers how utilization review discharge planning as an institutional survival technique has served both hospitals and Medicare's acute care services patients. It examines several proposals to re-engineer Medicare hospital discharge delivery--including the medically oriented proposals of Dr. Eric Coleman, the pharmaceutically oriented "Re-engineered Hospital Discharge" proposal from Boston Medical Center, and several narrower proposals to re-engineer Medicare hospital discharge finance, for example the bundling of acute care and rehabilitative services, and the imposition of financial penalties for Medicare rehospitalization. This article concludes that only coordinated efforts to support a forward-looking hospital discharge practice provide any hope at all in effectively re-engineering Medicare acute care hospital discharge for improved patient health outcomes and improved system efficiency. (10)

Medicare is a one size fits all health care program (11) whose legal, financial, and delivery structure is particularly ill-suited to serve a diverse Medicare beneficiary population. It turns out that Medicare hospitalization recidivism is not one problem but a constellation of interlocking problems: primarily those of the failure to provide ongoing care for the chronically ill, the problem of medically inappropriate primary hospitalizations and rehospitalizations, and the failure to effectively plan and deliver the services necessary for successful community re-entry upon acute care hospital discharge. Combine these with our systemic problems of failure to deliver primary care and the standardless provision of health care and the recipe is complete.

Successfully re-engineering Medicare hospital discharge, to ameliorate Medicare hospital recidivism, will require a cross disciplinary analysis and approach. The failure to provide ongoing care for the chronically ill within the Medicare beneficiary population is intimately related to Medicare reimbursement rates for chronic care services--particularly chronic care patient self-care training--and so requires a comprehensive look at those who might provide the care, how it might be delivered, what level of chronic care support it would take to make a dent in Medicare hospital recidivism, as well as who will pay for the ongoing chronic care or who will bear the expense of hospital recidivism if ongoing chronic care is not provided.

This article attempts such a multi-faceted analysis and approach.



Preventable Medicare hospital readmissions (12) are unpopular with patients, (13) with patients' families, (14) and with health care analysts of all stripes. (15) Yet nearly 18% of Medicare patients admitted to an acute care hospital are readmitted within thirty days of discharge, at an estimated price tag of some $15 billion in annual spending. (16) The number of readmissions increases dramatically if the time frame is expanded to include those that occur within ninety days of discharge. (17) Thanks, in part, to a lively ongoing public debate on all matters involving health care, these facts are becoming better known: patients who bounce back to the hospital in short order and their families are becoming aware that they are not unfortunate and unlucky exceptions but rather the rule in a broken system.

The problem of avoidable hospitalizations and rehospitalizations is larger than the Medicare program and the population of Medicare beneficiaries. At the intersection of efforts to increase quality of care and decrease costs, interest has focused on preventing avoidable primary hospitalizations and preventing rebound readmissions. (18) The data from private insurers on the prevalence of the problem is scant, however, and often proprietary. Medicare, by contrast, collects such data on an annual basis.

Much is known about Medicare rehospitalization because Medicare's financial arm has been tracking and studying rebound hospitalizations of Medicare funded patients for years. (19) The Medicare Payment Advisory Commission (MedPAC) is an independent Congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. The Commission's twice annual reports make frequent use of Medicare patient data to advise Congress on Medicare payment system topics. But the trend of increasingly costly rehospitalizations has continued remarkably unabated. (20) It is a complex problem, and so attempts to provide a simple fix have been unsuccessful. Avoidable Medicare rehospitalization may, in short, represent a constellation of problems that produce a similar outcome.

A recent increase in Medicare claim data analysis that describes patterns of Medicare rehospitalization, the demographics of Medicare rehospitalization, and the financial structure of Medicare rehospitalization makes this paper possible. As of July 2009, The Joint Commission has incorporated into its website the Centers for Medicare & Medicaid Services' thirty-day readmission rates for heart attack, heart failure, and pneumonia Medicare patients. (21) Without this background of data analysis, (22) it would not be possible to evaluate the range of reform proposals--spanning both the Medicare financial and Medicare delivery fields--that show promise in attacking one set of the problems that lead to avoidable Medicare rehospitalization.

What is known is known principally from the Medicare fee-for-service data set. (23) It is known that almost one-fifth of Medicare beneficiaries who had been discharged from a hospital were rehospitalized within thirty days. (24) It is known that only 10% of this total--2% of hospitalized beneficiaries--planned rehospitalization (25) (e.g., staged surgery). And a full half of the patients rehospitalized within thirty days after a medical (as opposed to a surgical) discharge to the community showed no sign of having seen a doctor in an office visit between the time of discharge and the time of rehospitalization. (26) Even those with unplanned rehospitalizations following surgical discharge were overwhelmingly rehospitalized not for surgical complications but for a different medical condition, (27) and those rehospitalizations were lengthier than primary hospitalizations for non-post-surgery Medicare beneficiaries with the same diagnosis. (28) We know that, all told, unplanned rehospitalizations in 2004 cost Medicare $17.4 billion dollars and cost beneficiaries a reduced quality of life. (29) The cost of preventable Medicare hospital readmissions may well include some cost in the loss of life itself, as newly adjusted thirty day mortality data may disclose. (30)

A problem of the magnitude of unplanned Medicare rehospitalizations does have some broad patterns: the diagnoses for which beneficiaries are rehospitalized, the lack of outpatient follow-up care, and extraordinary regional variation across the United States.

One pattern concerns the broad outlines of the diagnoses that are most involved in Medicare rehospitalization. Certain conditions at discharge are disproportionately represented in unplanned Medicare rehospitalizations. (31) The top five medical conditions generating the most readmissions concern: heart failure, pneumonia, chronic obstructive pulmonary disease, psychoses, and gastrointestinal problems. (32) Four of these conditions may fairly be characterized as chronic. The top five surgical procedures most likely to require readmission concern: cardiac stent placement, major hip or knee surgery, vascular surgery, major bowel surgery, and other hip or femur surgery. (33) If these are as much as 90% of unplanned rehospitalizations, then there is a chronic-care after care as well as a surgical-care after care story to be told.

A second pattern is the lack of outpatient follow-up care for more than half of the patients with a medical discharge who were readmitted within thirty days to the community. These individuals, in short, showed no record of primary care receipt between their original hospital discharge and their rehospitalization. A corollary of this second pattern is the high number of medical rehospitalizations following a surgical discharge. If these are also as much as 90% unplanned rehospitalizations, than there is a primary care in relation to after care story to be told.

A third pattern is the health care truism that in America geography is destiny. Readmission rates range from 13% in Idaho to over 23% in Washington, D.C. (34) The Dartmouth Atlas of Health Care has shown that Medicare hospital admissions vary by a factor of more than two among different regions in the United States, suggesting that there are large differences in the predisposition to hospitalize that also carry over to the predisposition to rehospitalize. (35) If these are as much as 90% unplanned rehospitalizations, then there is a variability of practice and supply side after care story that needs to be told as well.

These three themes--the problem of after care for chronically ill Medicare beneficiaries, the problem of primary care follow-up for Medicare beneficiaries, and the problem of geographic variability or standardless medicine for Medicare beneficiaries--shape this look at the causes and cures of Medicare hospital recidivism. None make sense as a cause and the reform of none of them makes sense as a cure for Medicare hospital recidivism without (a) a practical understanding of how Medicare hospital discharge functions at present, and (b) an historical look at the role hospital discharge has played in acute care for Americans. How did the problem of Medicare hospital readmissions come to be laid at the door of America's acute care hospitals?


1. Hospital Discharge Practice in the Nineteenth Century

This history of acute care hospital discharge planning in the United States is part history of science, part history of medical and social institutions, and part history of medicine and the associated professions. But it is, most importantly, a history of the acute care hospital patient--a role whose transformation over time and in different medical contexts has seesawed between that of passive recipient of medical and social aid and that of active and self-aware health care services consumer.

It is necessary to understand the history of acute care hospital discharge planning in the United States because it is this history that shaped the form of acute care hospitalization and continues to shape it to this day. Our great hospital system is not unlike a Russian matrushka doll--containing within it, hidden deep inside, all the earlier iterations of the figure itself. The different layered historical models of acute care, of discharge, and of planning for discharge that make up this history are essential pieces of understanding current practice, so that we may consider what may or may not be worth building on going forward. Most particularly, an understanding of the history of acute care utilization and acute care after care will spare us from the error of longing for good old days that never were and help us to focus on the strengths of the systems designed to assist the chronically ill--the most expensive of Medicare beneficiaries, themselves disproportionately represented in Medicare hospital recidivism. The story of the design of systems of successful re-entry of the chronically ill to American society can be traced in the design of community re-entry programs and services for the mentally ill, and it is for that reason that a closer look at the origins of hospital discharge planning for the chronically mental ill in America is included here.

Acute care hospital discharge practice has, since its origins, been a hospital based practice. From the establishment of the first hospital "aftercare committee with a single social work-trained aftercare agent at New York's Manhattan State Hospital" in 1906 (36) to the present, the "what next" conversation has been understood to be the particular responsibility of the hospital. This tradition of hospital institutional responsibility--often more honored in the breech--continues to this day: discharge planning is the responsibility of the acute care hospital, and what the hospital does not do will simply not be done by anyone.

The first American hospitals grew out of almshouses oriented exclusively towards serving only those ill who lacked family and friends to nurse them at home. Only those without the social capital or the human capital to acquire status and resources to command aid (37) were required to receive medical care outside of the home. Almshouses did not have patients. They had inmates. The terminology of the penal community was particularly apposite in a setting where the medical inmates were expected, even required, to help in the institution's nursing, washing, ironing, and cleaning responsibilities (38) towards fellow inmates.

From one perspective, the nineteenth century American almshouses can be understood as patient health care collectives for those too ill to self-care at home and too poor to hire paid attendants to spare them leaving their homes. An almshouse was a residence of last resort. And the assistance provided there was provided with as much of a moralistic objective as a medical one. (39) The inmate was seen as more chronic than curable--at most improvable rather than curable. Anything resembling discharge planning would have been shaped around these modest expectations of recidivism.

Hospitals, as distinct from almshouses, were rare places. As Paul Starr so aptly notes:

   In the early nineteenth century, there was little demand for the
   services of general hospitals in America. Almost no one who had a
   choice sought hospital care. Hospitals were regarded with dread,
   and rightly so. They were dangerous places; when sick, people were
   safer at home. The few who became patients went into hospitals
   because of special circumstances, which generally had to do with
   isolation of one kind or another from the networks of familial
   assistance. They might be seamen in a strange port, travelers,
   homeless paupers, or the solitary aged--those who, traveling or
   destitute, were unlucky enough to fall sick without family,
   friends, or servants to care for them. … 

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