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Oroville Hospital is seen in a photo taken on Feb. 10. (Ty Barbour/Staff File Photo)
A new Medicare program that punishes hospitals with high patient readmissions rates is forcing administrators to reach out and improve how patients are cared for, even after they’re wheeled out the hospital doors.Working to reduce runaway costs, Medicare is now penalizing hospitals across California and nationwide for patients who must be admitted again within 30 days.
Nearly one in five patients discharged from U.S. hospitals ends up returning within a month, often with problems that could have been prevented if those patients received much cheaper follow-up care.
So the federal government has started disciplining hospitals with high readmission rates, withholding as much as 1 percent of the money Medicare would normally reimburse them.
Oroville Hospital is one of the eight hospitals in California that got the maximum penalty.
The hospital’s Director of Patient Services and Chief Medical Officer, Dr. Matthew Fine, called the rating method simplistic and said the hospital is more concerned with improving patient care than improving numbers.
“This is an imperfect measure of readmissions,” Fine said. “It’s using simplistic numbers to measure a very complex situation.”
The penalties worry some health care experts who say facilities serving low-income communities will be hit the hardest by the new program, part of the 2010 federal health care reform law.
Confirming their fears, most of the eight hospitals in California paying the stiffest penalties this year are located in low-income areas, according to the latest numbers released by Medicare in March.Fine said the Medicare evaluation did not consider socio-economic conditions in areas such as south Butte County communities such as poverty, homelessness, low-education levels and high smoking rates.
In addition, Fine said that many hospitals with higher admission rates — including Oroville Hospital — also had low mortality rates, indicating the rating did not consider the complexity of the conditions in the readmissions study.
Others say with Medicare costs spiraling upward, federal officials need to curb unnecessary patient readmissions, estimated to cost Medicare nearly $18 billion a year. The penalties, they say, will also promote better patient care.
The penalty system is imperfect, but it’s a good place to start, said Dr. Robert M. Wachter, professor and associate chair at the UC San Francisco Department of Medicine.
“It’s forcing hospitals to think about things they never thought about before,” said Wachter, who writes frequently about health care quality. “If you wait until the tool is less blunt, I think you’ll wait forever.”
All the hospitals paying big penalties this year are small or medium-sized hospitals. That does not surprise some hospital leaders familiar with the geographic disparities of the California health care system.
“A lot of problems exist in the Central Valley that don’t exist in Newport Beach,” said Tom Petersen, executive director of the Association of California Healthcare Districts, which represents mainly smaller hospitals with publicly elected boards — half of them in rural areas.
Petersen is taking a wait-and-see approach to the penalty rollout, but he notes hospitals have little control if their patients fail to follow doctors’ instructions after they’re discharged.
“The hospital doesn’t have the ability to control behavior outside the hospital,” he said.
Medicare disagrees, and hopes the new program pressures hospital officials to improve their discharge planning and strengthen ties with primary care doctors and clinics in surrounding communities.
But in California there’s a physician shortage undercutting outpatient care.
Petersen points out the California Medical Board’s most recent annual report lists only nine physicians with current licenses in Colusa County, where Colusa Regional Medical Center is being slapped with a 0.82 percent, penalty, just shy of the worst-case fine.
The penalty system focuses on Medicare patients hospitalized with three types of medical conditions — heart attacks, heart failure and pneumonia. The penalties are expected to recoup about $280 million in the first year.
Next, officials plan to add patients with hip and knee implants and chronic obstructive pulmonary disease, Medicare announced April 26. The largest penalties will rise to 2 percent this October and 3 percent a year later.
In all, 276 hospitals nationally this year are paying the maximum penalty, according to a Kaiser Health News analysis.
Nancy E. Foster, vice president for quality and patient safety policy at the American Hospital Association, calls the program as now structured, “unfair.”
“It puts hospitals serving low-income patients at risk. We don’t think that’s right,” Foster said.
Amid the debate over the program’s fairness, many hospitals statewide and nationally are designing new tools to reduce preventable readmissions.
Some hospitals and clinics have launched pilot projects in partnership with the Centers for Medicare and Medicaid Services.
The first such pilot in the state began last year in Marin County, with county public health employees working with Marin General Hospital and Sutter-owned Novato Community Hospital.
The county provides four trained coaches, all nurses, to assist patients recently discharged from both hospitals, said Ana Bagtas, a program manager in the county Department of Health and Human Services.
“A lot of patients, when you’re discharged, it’s overwhelming. It’s hard to follow your discharge plans. The patient just needs a little attention, a boost,” Bagtas said.
Oroville Hospital takes a slightly different tack. Fine said the hospital’s discharge system already does a good job, but the system is being strengthened in response to the Medicare policy.
For one, the hospital is refining the methods for completing a discharge summary and sending it to the patient within three to five days of release.
On May 20, Fine has scheduled an educational workshop with doctors, nurses and other hospital personnel on completing the discharge summary.
The summary includes the diagnosis and what happened to the patient during the hospital stay including surgeries, tests and recommended treatments. The discharge summary is also provided to the patient’s care provider.
In addition, with a shortage of health care providers, the hospital will connect a patient with a provider before they go home, Fine said.
“I never like to think we are perfect,” Fine said. That’s because there are always ways to improve health care in the complex medical field with advancements coming all the time, he said.
As the penalty program matures, it will likely be tweaked to take into account the disparities among hospitals, such as those serving primarily lower-income patients, Wachter said.
“What you see is an environment that’s shifting from one where, in the old days, the best hospitals and the worst hospitals got paid exactly the same by Medicare and private insurers,” Wachter said.
“We’ve woken up in American medicine,” he added. “We’re seeing a sea change in the level of responsibility that people are going to hold us to. And I think that’s appropriate.”
Four north valley hospitals were docked Medicare reimbursement over the number of readmitted patients. They were:
Oroville Hospital — 1 percent
Colusa Regional Medical Center — 0.82 percent
Enloe Medical Center, Chico — 0.19 percent
Rideout Memorial Hospital, Marysville — 0.06 percent
St. Elizabeth Community Hospital, Red Bluff — 0.04 percent.
Deborah Schoch is a senior writer at the Center for health Reporting, funded by the California Health Care Foundation. Staff writer Mary Weston contributed to this report.