Should those who assist the needy be punished for their charity?

Surely the president and Congress intended no such thing through the Affordable Care Act’s commendable objective of putting comprehensive healthcare within the reach of more Americans. But a blue ribbon panel of 26 top healthcare experts working under the auspices of the nonpartisan National Quality Forum confirms in its draft report that such a strange cause and effect equation is truly in force. It’s a perverse, unintended consequence of a law that otherwise is providing a multitude of social benefits – not only expanding health insurance coverage, but also incentivizing behaviors to better coordinate care, reduce expenses and eliminate unnecessary ones. With all this good, however, comes an unfortunate circumstance: the federal government is unfairly penalizing hospitals that care for our country’s most vulnerable individuals.


The Affordable Care Act employs a clawback of Medicare payments as a prompt for hospitals to reduce readmissions, defined as patients who are readmitted within 30 days of discharge. The penalty, currently as much as 2 percent of Medicare payments, is scheduled to rise later this year to a maximum 3 percent for hospitals that have a high ratio of readmissions relative to the national average. Problem is, the Centers for Medicare and Medicaid Services (CMS) fails to take into account factors that have a huge impact on readmission rates but are far beyond the control of hospitals -- in particular, poverty and lack of access to critical resources like food and stable housing.

Consider several real-life examples from our surrounding community:

•       An emphysema patient returns from the hospital to a moldy apartment, which then aggravates his condition.

•       An impoverished elderly patient is discharged after treatment for heart failure and comes back to an apartment building where the elevator then breaks down. Without the ability to climb stairs, he becomes a prisoner in his own home, unable to go out for a walk, visit the market for heart-healthy, fresh food and make it to his doctor appointments for follow-up care.

•       A patient discharged from the hospital but still suffering from multiple diseases has lost a job, has no health insurance, and now must spend precious dollars on food and rent, rather than buy medications he should be taking.

Such conditions frequently land patients back in the hospital through no fault of the medical professionals who have treated them. A new University of Michigan study confirms the higher readmission rates and greater cost of treating impoverished patients. The research, published in the current edition of JAMA Surgery, compared Medicaid surgical patients to those who could afford private health insurance, finding that those on  Medicaid not only were readmitted more frequently, but also used 50% more hospital resources, needed extra recovery time in the hospital and had more complications.

Regardless of patients’ socioeconomic status those readmissions count against a hospital’s quality ranking, according to the federal government’s standards. Conversely, hospitals in relatively affluent neighborhoods generally serve patients facing far fewer challenges at home -- nearly all can afford medications and healthy food, and have the means and ability to visit doctors for checkups -- which helps those hospitals report lower readmissions. As a result, medical care at such institutions is often deemed to be of higher quality compared to hospitals in poorer neighborhoods, even when that is not the case. 

Far more than reputation is at stake. In today’s pay for performance insurance world, hospitals in upscale areas can receive higher reimbursement rates than those in poor neighborhoods, while also avoiding penalties that the government metes out to hospitals serving the impoverished.

The National Quality Forum’s draft recommendations call for socioeconomic factors to be taken into account in assessing hospital quality, including analysis of all-important readmission rates. That is sage advice, and it should be carried out with precision. A recent Mount Sinai Health System study showed that choosing the wrong measure of socioeconomic status can artificially underweight its overall impact on patients’ health outcomes.

Furthermore, the National Quality Forum’s expert panel warns that the lack of adjustment of hospital performance measures for socioeconomic status “can actually harm patients, and exacerbate disparities in care.” When hospitals serving our most vulnerable populations are penalized over readmission data that do not accurately reflect quality of care, the financial viability and services of such essential institutions can be threatened.

Even so, the Centers for Medicare and Medicaid Services, which relies upon National Quality Forum endorsed methodology for determining excess readmissions, says it opposes adjusting quality measures for the socioeconomic status of patients because it does not want to hold hospitals to differing standards of care. CMS must reassess its stance. This is not a question of differing standards. Hospitals simply want be judged on a level and fair playing field so they will no longer be punished for providing compassionate care for those members of our society in greatest need.

Davis is CEO and president of the Mount Sinai Health System.