Health Policy$ense

Readmissions Penalties, Socioeconomic Status, and Vulnerable Populations

Hospitals Urged to Adopt Public Health Mindset

Some hospital leaders have complained that quality metrics like hospital readmissions unfairly penalize provider organizations for serving vulnerable, high-risk populations. Should Medicare readmission penalties be adjusted for patients’ socioeconomic risk factors?

The specific issue of adjustment – and the larger issue of how socioeconomic status (SES) influences care quality and utilization – has drawn attention from federal policymakers and many hospitals leaders around the country. In particular, it is the subject of a series of reports by the National Academies of Sciences, Engineering, and Medicine, the second of which was released this week.

The merits of the readmission metric itself aside, adjustment alone is not a panacea for improving health care quality or creating parity for vulnerable patients. It does not inherently compel hospitals to address the population-level roots of socioeconomic risk factors and may even reduce the motivation to redesign and improve their care delivery processes.

Instead, we believe that hospitals will improve outcomes for socially vulnerable populations only if they also embrace population health-minded organizational strategies and collaborations aimed at out-of-hospital interventions – points that are underscored in several ways by the second report.

First and foremost, the Academies’ report – Systems Practices for the Care of Socially At-Risk Populations – rightly notes that in order “to improve health equity and outcomes for socially at-risk populations”, systems often require “a set of interconnected actors who work together” rather than individual hospitals or organizations. Framing systems in this way is a foundational step in the path towards effective new systems practices.

Second, the report specifically emphasizes collaborative partnerships as an important systems practice. A number of hospitals, including those that serve a large proportion of vulnerable patients, have successfully partnered with non-hospital stakeholders (e.g., non-profits, departments of health) to address social risk factors and reduce hospital readmissions. As more providers take up the call by CMS’s new Accountable Health Communities Model to test linkages between hospitals, public health entities and social service organizations, we are likely to learn how “enhanced clinical-community linkages” can address health-related social needs and improve patient outcomes.

Third, the report highlights the need for organizations to develop clear strategies around data and measurement and comprehensive needs assessment related to social risk factors. As noted in the first Academies’ report, there are multiple facets to socioeconomic status, and efforts to address population-level social risk factors will only be as successful as the ability to assess, document and track them. Organizational focus on out-of-hospital interventions and cross-sector collaboration can help hospitals more accurately measure and assess patients’ social needs beyond hospital walls.

Even as it highlights promising systems practices, however, this report leaves a related question about sustainability largely unaddressed: if financial incentives are key “prerequisites” for adoption and sustainability of key practices, how should they be integrated into payment policy? To achieve the goals outlined in the report, some hospitals may be able to appropriate internal resources while others must link with resourced community partners. How policy should encourage providers to pursue these options (or others entirely) remains an open issue that we hope will be discussed in detail in future reports.

Nonetheless, the Academies’ report contributes to the ongoing discussion about readmissions penalties and socioeconomic status. By describing how medical providers can partner with entities such as social service agencies, public health agencies and other community organizations, the report reinforces that adjustment should only be one part of the discourse about readmissions penalties and socioeconomic status. Hospitals should also be encouraged – and perhaps incentivized – to adopt public health-minded organizational strategies and cross-sector partnerships.