Document Type

Article

Publication Date

7-7-2019

Publication Title

The Journal of Health Care Organization, Provision, and Financing

Publisher

SAGE Publications

Volume

56

First page number:

1

Last page number:

10

Abstract

This longitudinal study examines whether readmission rates, made transparent through Hospital Compare, affect hospital financial performance by examining 98 hospitals in the State of Washington from 2012 to 2014. Readmission rates for acute myocardial infarction (AMI), pneumonia (PN), and heart failure (HF) were examined against operating revenues per patient, operating expenses per patient, and operating margin. Using hospital-level fixed effects regression on 276 hospital year observations, the analysis indicated that a reduction in AMI readmission rates is related with increased operating revenues as expenses associated with costly treatments related with unnecessary readmissions are avoided. Additionally, reducing readmission rates is related with an increase in operating expenses. As a net effect, increased PN readmission rates may show marginal increase in operating margin because of the higher operating revenues due to readmissions. However, as readmissions continue to happen, a gradual increase in expenses due to greater use of resources may lead to decreased profitability.

Keywords

Transparency; Readmission rates; Financial performance; Hospital

Disciplines

Health and Medical Administration

File Format

pdf

File Size

148 KB

Language

English

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License

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