Effect of Financial Penalties on Health Outcomes

A CLAHRC WM study showed that financial penalties implemented in the West Midlands region, but not elsewhere, resulted in a sharp increase in a desired outcome – increased use of home haemodialysis.[1] A time series study of financial penalties for readmission of patients with certain target conditions (heart failure, pneumonia, and myocardial infarction) found a step change reduction in 30 day readmission rates from 22% to 18% after the implementation of the penalty.[2] Interestingly, readmissions for non-targeted conditions decreased by a similar amount. Use of observation-units was increasing gradually throughout the observation period, so it was possible that some readmissions were circumvented by sequestering patients in the observation-unit. However, hospitals with a greater increase in such wards did not have a greater reduction in readmission rates. Whether there was a price to pay in sick patients being sent home we cannot say. Also, in the absence of contemporaneous controls it is not clear that the change was caused by the intervention. The intervention was instituted as a result of a general concern about readmission rates among commissioners and providers, such that the change could have occurred as part of a ‘rising tide’.[3]

— Richard Lilford, CLAHRC WM Director

References:

  1. Combes G, Allen K, Sein K, Girling A, Lilford R. Taking hospital treatments home: a mixed methods case study looking at the barriers and success factors for home dialysis treatment and the influence of a target on uptake rates. Implement Sci. 2015; 10: 148.
  2. Zuckerman RB, Sheingold SH, Orav J, Ruhter J, Epstein AM. Readmissions, Observation, and the Hospital Readmissions Reduction Program. New Engl J Med. 2016; 374: 1543-51.
  3. Chen YF, Hemming K, Stevens AJ, Lilford RJ. Secular trends and evaluation of complex interventions: the rising tide phenomenon. BMJ Qual Saf. 2015. [ePub].
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