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Hospitals in Medicare ACOs Reduce Readmissions Faster Than Non-ACO Hospitals, Study Finds

Readmission rates “slightly but significantly” better for ACO-affiliated centers

Hospitals in Medicare accountable care organizations (ACOs) outpaced non-ACO hospitals in reducing the rate at which patients discharged to skilled nursing facilities (SNFs) needed to return to the hospital, according to a new study from Brown University. The findings were published in the January issue of Health Affairs.

When a hospital sends a patient to a nursing home, everyone’s hope is that the patient won’t have to resume acute care back at the hospital, but until recently about one in four did. To drive the rate down, Medicare has implemented measures, including penalties, to reduce excess readmissions and to encourage hospitals to join ACOs in which they share an overall “bundled” payment with SNFs. This model gives providers the incentive that they can keep more profit if they reduce expensive extra hospital care.

The new study suggests that while all hospitals reduced their readmission rates after the adoption of readmission penalties, ACO hospitals reduced them more quickly.

“This is about understanding whether ACOs work or not,” said coauthor Dr. Momotazur Rahman. “It seems like they are doing slightly but significantly better than non-ACO hospitals.”

To conduct the study, the researchers gathered information on discharges and readmissions between 2007 and 2013 from 220 ACO-affiliated hospitals and more than 1,840 non-ACO hospitals in metropolitan areas around the country. They chose the study timeframe to straddle passage of the Patient Protection and Affordable Care Act in 2010 and the implementation of two variants of ACOs––Pioneer and Shared Savings––in 2012. In this way, they not only could compare the readmission rates of different hospital types to each other, but also how each hospital type’s readmission rate changed before and after Medicare’s measures took effect.

They found that both ACO and non-ACO hospitals have succeeded in substantially reducing readmission rates, but that ACO hospitals have been measurably better. Over the entire period, relative to their readmission rate in 2007, non-ACO hospitals reduced readmissions by 13.1%, whereas hospitals in Pioneer ACOs reduced them by 14.9% and Shared Savings ACOs reduced them by 17.7%.

Another analysis showed that the pace of readmission reductions quickened further after the implementation of ACOs in 2012, suggesting that the policy made a difference. But exactly how that difference occurred is not clear, the authors concede. They did not see evidence in the data that hospitals became more selective about discharging patients to more capable SNFs, Rahman said. Moreover, the data didn’t show how hospitals and SNFs improved their care quality, or whether the two types of institutions improved communication about patients.

But the prospect of not only avoiding reimbursement penalties but also keeping more of a bundled payment appeared to have a measurable effect on reducing readmissions, the authors wrote.

Source: Brown University; January 9, 2016.

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