Updated on: April 25, 2019

Opinion: Too Much Money, Too Little ROI in Today’s Healthcare

Original story posted on: April 24, 2019

The search for a solution might begin with CMS.

We have a problem in America. We spend way too much money on healthcare, and the outcomes we do get are not great.

I am pretty darn tired of hearing about the move from volume to value. Do you know what that movement really is? It is an uncontrolled scientific experiment, with unsuspecting people as the participants. The HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey was forced on hospitals about 10 years ago, and it directly contributed to the opioid epidemic. Was it proven to improve outcomes before it was instituted? Nope.

Well, recently two other experimental programs on human beings were proven to be ineffective. First, a study scrutinized an employee wellness program. I am sure many of you have one of these. I know I do. I get a discount on my health insurance if I see my doctor, get some blood tests done, and allow a nurse to call me up and review the results.

In this study, though, they found out that the wellness program had no effect at all on employee wellness. But probably more important to the employer that funded the wellness program, it had no effect on healthcare spending. To steal from David Glaser, this study should be read while playing “Money for Nothing” by Dire Straits, since that’s what the employer got for their money: nothing.

The next report focused on the recent change in readmission penalties imposed by CMS when it started adjusting for socioeconomic status. When the program was established in 2012, readmission penalties were based solely on medical factors. Using an incomprehensible formula, CMS calculated an expected rate of readmissions and compared it to the actual rate. Then they applied a penalty for the next three years if a hospital exceeded its expected rate.

Starting in 2019, the percentage of dual-eligible patients started being used as a surrogate for socioeconomic factors, and it is now added to the formula. This report found that hospitals with a high percent of dual-eligible patients had their penalties reduced by over $28 million, an average of almost $500,000 per hospital. For a safety net hospital, that’s a whole lot of money.

Now, the question, of course, is will CMS admit that they had been unfairly penalizing hospitals for the past six years and pay back the money they collected? That’s unlikely. But hopefully, CMS will do more, start looking at all the social determinants of health, and make adjustments for those and stop taking money away from hospitals that need it the most.

I’ve talked before about medical reversals, things like Niacin or the swan ganz catheter, which we thought worked but didn’t. Maybe it’s time to take a step back with some of these quality initiatives and test them before adopting them.


Ronald Hirsch, MD, FACP, CHCQM

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays.

The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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