In addition to changes in utilization, revenue, and financial performance, health reform also has implications for measuring the quality of care provided, although there is uncertainty about the adequacy and appropriateness of some of these measures for safety net hospitals. Hospitals will now be required to monitor and track quality-of-care indicators both to comply with provisions of the ACA and to adhere to standards set by ACOs and other integrated systems. For example, the Hospital Readmissions Reduction Program established by the ACA penalizes hospitals up to 2 percent of Medicare revenue (FY 2014) for excessive 30-day readmission rates for conditions such as heart failure and pneumonia (penalties for FY 2015 and beyond increase to as much as 3 percent). Also, CMS has implemented the Medicare Hospital Value Based Purchasing Program that provides incentive payments to hospitals based on measures of clinical processes of care and patient experiences with care (Gage 2012). The TEP also raised concerns about the potential impact of CMS’s Hospital Acquired Conditions program—established under the ACA—which now penalizes hospitals 1 percent of their payments for having high rates of hospital- acquired conditions. States and localities also have initiatives designed to reward and incentivize hospitals for quality improvements. For example, DSRIP—part of California’s Bridge to Reform Medicaid waiver—was designed to incentivize primarily public hospitals for improvement projects such as infrastructure, care coordination, patient experiences, and clinical processes (Harbage and Ledford 2012).
Safety net hospitals are vulnerable to showing poor performance on a number of the standard quality measures being used in these initiatives. One study found that safety net hospitals had readmission rates that were 30 percent above the national average compared with non-safety net hospitals (Berenson and Shih 2012). There is concern that risk-adjustment methodologies may not adequately take into account the complex health and social problems of patients at many safety net hospitals, and that many of these hospitals do not have adequate financial resources needed to invest in the care processes, staff, and technologies necessary to reduce readmission rates (Lewis et al. 2012). Reductions in revenue due to poor performance on quality indicators, along with the added costs of having to invest and maintain quality-of-care monitoring, could adversely affect the financial performance of safety net hospitals.
Some researchers have suggested that quality indicators such as high hospital readmission rates do not reflect poor quality of care at the hospital, but rather the lack of follow-up care in the community and low patient compliance with care regimens—areas over which hospitals often have little control (Joynt and Jha 2012). Due to the high proportion of low-income and other vulnerable patients they serve, such limitations of quality-of-care measures would apply even more to safety net hospitals.
Quality measures that reflect improved access to primary care and care coordination between hospitals and community providers may be more meaningful for many safety net hospitals. Because of low-income people’s lack of access to timely primary and other ambulatory care in their communities, safety net hospitals often experience high levels of emergency department utilization—including for non-urgent conditions—as well as high rates of inpatient admissions for ambulatory care-sensitive conditions. Prior research has shown that when safety net hospitals are involved in integrated systems with primary care providers, there is a reduction in emergency department utilization and an increased use of primary care providers by uninsured and Medicaid patients (Roby et al. 2010; Katz and Brigham 2011). Indicators that reflect improved access to primary care and greater care coordination may be especially important to monitor at safety net hospitals.