This post is by Phil.
The “Affordable Care Act” a.k.a. “Obamacare” was passed in 2010, with its various pieces coming into play over the following few years. One of those pieces is penalties for hospitals that see high readmission rates. The theory here, or at least one of the theories here, was that hospitals could reduce readmission rates if they wanted to, but they didn’t have a strong incentive to do so, and indeed there was a moral hazard: if a hospital sends a patient home for good, they’re done collecting money from them, but if the patient has to come back for more treatment…cha-ching.
I have to admit I didn’t think this was going to be a big deal. I know doctors, I’ve seen doctors, some of my good friends are doctors, and I know they’re not scheming to make more money by providing bad treatment so the patients have to come back for more.
But…well, check out this plot, from the Department of Health and Human Services. The plot does us all a disservice by not starting its y-axis at 0, but still…wow. If the data are real and the plot is real, this is pretty stunning: a 20% reduction (or a 3.5 percentage point reduction) in readmissions for “HRRP”, and a similar scale reduction in all other readmissions.
My first thought was that the hospitals are gaming the system somehow by readmitting patients but not reporting them, but I’m not the first person to suggest this and supposedly “The new research shows that this isn’t the case. The number of observation stays are very small compared to readmissions and have increased steadily since at least 2008, with no acceleration after the Affordable Care Act was enacted.”
Of course, there are other possibilities, like maybe the hospitals are refusing to readmit patients even if they really should, or maybe they put them off a bit and readmit them on day 31 instead of day 28 or 29 or 30. But something like this would make their fatality numbers go up, and I assume someone tracks those.
One of the interesting things about this is that you really don’t need a statistician: the signal is so clear that the only questions are related to the definitions of things like “readmission.” A sixth-grader can look at the numbers and come up with a good estimate of the effect of the law on readmissions.