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Hospital Discharges Motivated By Money

Since 1980, the average length of hospital stays has declined from 7.3 days to 4.5 days. A recent New York Times article shows that hospital finances are a major reason for this decline.

Many recent studies have shown that shorter hospital stays are good for patients. Shorter stays for patients mean that hospitals are working effectively and that patients are not as exposed to potential infections in the hospital. Increasing awareness of these factors has helped to reduce the length of stays over the last 36 years. But a major force in the change was a new Medicare payment system.

In the early 1980s, Medicare moved from paying hospitals the costs they claimed on patients, to paying a set cost per patient based on the patient’s diagnosis. This change moved financial risks from Medicare to hospitals.

Medical professionals and policy makers alike worried that moving the financial responsibility to hospitals would encourage hospital stays that are too short, prompting increased hospital readmission rates. To prevent this, the government enacted penalties for high readmission rates: if hospitals have high readmission rates for patients within 30 days of their initial discharge, hospitals will lose up to 3% of their Medicare payments.

Last year that meant that 2,592 hospitals faced reduced payment penalties, losing a combined $420 million. That means that over half of all hospitals in the United States had readmission rates higher than what Medicare deemed normal.

Studies have found a “U” shaped relationship between the length of hospital stay and the likelihood of readmission: patients who leave too early may require readmission, but patients who stay too long also face increased risks. Medicare looked at the mix of patients at each specific hospital along with the overall performance of the hospital industry to determine acceptable rates of readmission.

More specifically, Medicare looks at rates of readmission for patients hospitalized for one of five conditions: heart attack, heart failure, chronic lung problems, pneumonia, or elective hip or knee replacements. Patients who have been admitted to hospitals for one of these five conditions should be wary of early discharges.

Before discharging patients from the hospital, healthcare professionals should be able to answer “yes” to all of these questions:

  • Is the patient in stable condition?
  • Did the patient receive all the care she/he needed?
  • Is the patient in a sound state of mind and mentally aware?
  • Does the patient feel comfortable with the current discharge date?
  • Did the patient receive ample instructions for care after discharge?
  • Does the patient have somewhere safe to continue recovery?
  • Was a follow-up appointment scheduled if needed?

One factor that may lead medical professionals to falsely believe a patient is ready for discharge is a “false handoff” or a failure in communication and information transfer from hospitals to primary care physicians. Studies have found that over 41% of discharged patients have a test pending at discharge, and only 25% of discharge summaries mention these pending tests. About 1 in 10 patients required intervention because of pending test results. Almost one-third of tests recommended as a follow-up for the patient were never completed.

As a patient, you should know the hospital’s discharge policy and be aware of the information you should have at discharge. You should also know what questions to ask your assisting medical professionals if you are worried that your discharge may be too early.

About the Author

Charles GilmanCharles Gilman
Charles Gilman

As managing partner and co-founder of Gilman & Bedigian, it is my mission to help our clients recover and get their lives back on track. I strongly believe that every person who is injured by a wrongful act deserves compensation, and I will do my utmost to bring recompense to those who need and deserve it.


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