Medicare to Reward Hospitals for Providing Better Care

Changing the financial incentives may encourage hospitals to provide better care in the first place.

Heart failure. Pneumonia. Heart attack.  If you or a loved one has 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 as a result of the Affordable Care Act (the healthcare 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 “avoidable readmissions.” That’s when a patient has to go back into the hospital shortly after being discharged.

Hospitals with 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? 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 discharged. 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 patients how to take their medications when discharged, they 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 one 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. Hospitals can do a better job 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 healthcare providers who care for the patient. 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 and what medications were prescribed.
You have a role to play, too. A stay at a hospital can be overwhelming, but you need to take the time to ask important questions about your care plan and to make sure you understand it. You can ask a family member or friend to help. There are also several resources to help you through this process:

• The Family Caregiver Alliance provides a guide families and caregivers can use during the hospital discharge planning process; this guide is online at under “Fact Sheets.”

• Medicare has created a checklist you can use during discharge from a hospital; the checklist is available online 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 executive director of Families USA (


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