Stephen F. Jencks

Rehospitalizations among patients in the Medicare fee-for-service program.

BACKGROUND Reducing rates of rehospitalization has attracted attention from policymakers as a way to improve quality of care and reduce costs. However, we have limited information on the frequency and patterns of rehospitalization in the United States to aid in planning the necessary changes. METHODS We analyzed Medicare claims data from 2003-2004 to describe the patterns of rehospitalization and the relation of rehospitalization to demographic characteristics of the patients and to characteristics of the hospitals. RESULTS Almost one fifth (19.6%) of the 11,855,702 Medicare beneficiaries who had been discharged from a hospital were rehospitalized within 30 days, and 34.0% were rehospitalized within 90 days; 67.1% [corrected] of patients who had been discharged with medical conditions and 51.5% of those who had been discharged after surgical procedures were rehospitalized or died within the first year after discharge. In the case of 50.2% [corrected] of the patients who were rehospitalized within 30 days after a medical discharge to the community, there was no bill for a visit to a physicians office between the time of discharge and rehospitalization. Among patients who were rehospitalized within 30 days after a surgical discharge, 70.5% were rehospitalized for a medical condition. We estimate that about 10% of rehospitalizations were likely to have been planned. The average stay of rehospitalized patients was 0.6 day longer than that of patients in the same diagnosis-related group whose most recent hospitalization had been at least 6 months previously. We estimate that the cost to Medicare of unplanned rehospitalizations in 2004 was

Refining Case-Mix Adjustment

17.4 billion. CONCLUSIONS Rehospitalizations among Medicare beneficiaries are prevalent and costly.

Strategies for reforming Medicare's physician payments. Physician diagnosis-related groups and other approaches.

We review case-mix adjustment, which is the process of adjusting for differences in the cases treated in different hospitals so that their costs or outcomes can be compared. We examine the Medicare payment system, which rests on case-mix adjustment, and identify areas, including outlier payments, in which payment accuracy might be improved without better measurement of the severity of illness. There is no available measure of severity of illness that would produce a large improvement in the accuracy of Medicare payments if used to supplement or replace the system of diagnosis-related groups. Evidence regarding whether better measurement of severity would substantially change the distribution of payments across hospitals is mixed. Considerable evidence suggests that the intensity of medically appropriate treatment for patients in the same diagnosis-related group varies substantially for reasons other than the severity of illness. Despite great demand for measures of the quality of care, important technical problems must be solved before we can be confident that differences in case-mix-adjusted outcomes reflect differences in the quality of care.