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Medicare rewards hospitals for better care

By Ron Pollack

Heart failure. Pneumonia. Heart attack. If you or a loved one suffers from one of these health conditions, you will want to make sure you get the right follow-up treatment. And now your local hospital will have a financial interest in making sure you do, too.

While politicians talk about how to reduce Medicare spending in the future, some steps are being taken right now as a result of the Affordable Care Act (the health care law). One of the big improvements the law made is to encourage hospitals to do a better job and get it right the first time. This will help prevent what are called “avoidable readmissions.” That’s when a patient has to go back into the hospital shortly after being discharged.

Now hospitals that have high rates of readmission for three health conditions — heart failure, pneumonia and heart attack — will have their Medicare payment rates reduced. Over the next few years, more conditions will be added to the list.

Why is this needed? Because evidence shows that too many patients end up back in the hospital when they don’t get the right care while they are there or when they are being discharged. Of course, sometimes patients need to be readmitted through no fault of the hospital — for example, the person may need multiple surgeries to treat a particular condition. But too often, these readmissions could have been prevented with better care.

For example, if no one at the hospital explains to a patient how to take his or her medications when he or she is being discharged, he or she might easily end up with complications that put them back in the hospital. Until now, that hospital would have been paid when the patient was readmitted. So a hospital that didn’t do a very good job could easily get paid more than a hospital that kept its patients healthier.

Clearly, we want to reward hospitals for taking good care of their patients, not for giving them inadequate care. Changing the financial incentives will encourage hospitals to provide better care in the first place. For example, hospitals can do a better job when the patient is in the hospital by ensuring that all staff wash their hands frequently, which prevents the spread of infection. Hospitals can also improve communication with patients (and their caregivers) and with other health care providers who care for the patient. For example, they can make sure patients know how to care for themselves when they leave the hospital and that their regular doctors know what tests were performed at the hospital and what medications were prescribed.

The patient has a role to play, too. A stay at a hospital can be overwhelming, but the patient needs to take the time to ask important questions about their care plan and to make sure they understand it. He or she can ask a family member or friend to help. There are also several resources that help the patient and caregiver through this process. The Family Caregiver Alliance provides an online guide for families and caregivers that they can use during the hospital discharge planning process at under “Fact Sheets.” Medicare has created a checklist to use during discharge from a hospital, which can be found at And if you ever have concerns about the quality of the care you receive, you can contact your local Medicare Quality Improvement Organization (QIO). You can find your local QIO by visiting and clicking on QIO Locator. To learn more about how a QIO can help, visit

Hospitals can greatly improve the outcome for patients by taking proven steps, such as patient education. No one wants to be in the hospital, and you certainly don’t want to have to go back if that can be avoided. This change to the way hospitals are paid is a smart first step to improving care for all of us.

Ron Pollack is the executive director of Families USA, a national organization for health care consumers. It is nonprofit and nonpartisan, and its mission is to secure high-quality, affordable health coverage and care for all Americans.


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