On 2014 Oct 02, David Keller commented:

Quicker-and-sicker discharges inevitably result in increased hospital re-admissions

Medicare and many private insurers pay hospitals a fixed amount to treat a given diagnosis, regardless of length of stay, which creates a financial incentive to discharge patients as soon as possible. Targets for shorter lengths of stay are set by hospital managements and are incorporated into the performance reviews of employed hospitalist physicians. With hospitalists pushing the envelope to get patients discharged quicker, an increase in the number of "bounce-back" re-admissions is inevitable, due to inadequate treatment, recrudescence of illness, or the lack of resources or support needed to complete recovery at home. To discourage premature discharges, financial penalties for "bounce-back" re-admissions were created by Medicare and other payers. Of course, these penalties are also incorporated into the performance reviews of employed physicians, and create a disincentive to readmit patients who were recently discharged. But, if the patient presents for treatment at a different hospital, the readmission penalty applies against the first hospital to treat and discharge the patient, not the second hospital. Thus, recently-discharged patients who are still too sick to complete their recovery at home may find it easier to be readmitted at a new hospital for inpatient treatment, where they will be evaluated by physicians who do not have a disincentive to re-admit them. Switching hospitals can make it easier for a still-sick patient to get re-hospitalized, but it also results in discontinuities of care and resulting inefficiencies, because records need to be transferred, new doctors need to learn about the patient, etc. This all just demonstrates that for every action to reduce costs by penalizing providers, there are unintended consequences which can harm patients.

On 2014 Oct 02, David Keller commented:

Quicker-and-sicker discharges inevitably result in increased hospital re-admissions

Medicare and many private insurers pay hospitals a fixed amount to treat a given diagnosis, regardless of length of stay, which creates a financial incentive to discharge patients as soon as possible. Targets for shorter lengths of stay are set by hospital managements and are incorporated into the performance reviews of employed hospitalist physicians. With hospitalists pushing the envelope to get patients discharged quicker, an increase in the number of "bounce-back" re-admissions is inevitable, due to inadequate treatment, recrudescence of illness, or the lack of resources or support needed to complete recovery at home. To discourage premature discharges, financial penalties for "bounce-back" re-admissions were created by Medicare and other payers. Of course, these penalties are also incorporated into the performance reviews of employed physicians, and create a disincentive to readmit patients who were recently discharged. But, if the patient presents for treatment at a different hospital, the readmission penalty applies against the first hospital to treat and discharge the patient, not the second hospital. Thus, recently-discharged patients who are still too sick to complete their recovery at home may find it easier to be readmitted at a new hospital for inpatient treatment, where they will be evaluated by physicians who do not have a disincentive to re-admit them. Switching hospitals can make it easier for a still-sick patient to get re-hospitalized, but it also results in discontinuities of care and resulting inefficiencies, because records need to be transferred, new doctors need to learn about the patient, etc. This all just demonstrates that for every action to reduce costs by penalizing providers, there are unintended consequences which can harm patients.