Development and Implementation of a Maryland State Program Providing Hospital Payment Incentives for Reduction in...

Social factors are a key determinant of hospital readmission. We describe the development of the country's first statewide policy providing hospitals with financial incentives to reduce readmission disparities.

To describe the development and evaluation of a novel program that measures hospital-level disparity in readmission and rewards hospitals for improvement.

Observational study using inpatient claims.

Baseline data included 454,372 all-cause inpatient discharges in 2018 and 2019. Of the included discharges, 34.01% involved Black patients, 40.44% involved female patients, 33.1% involved patients covered by Medicaid, and 11.76% involved patients who were readmitted. Mean age was 55.18.

The key measure was the percentage change over time within the hospital in readmission disparity. Readmission disparity was measured using a multilevel model that gauged the association between social factors and readmission risk at a given hospital. Three social factors (Race, Medicaid coverage, and Area Deprivation Index) were combined into an index reflecting exposure to social adversity.

Of the State's 45 acute-care hospitals, 26 exhibited improved disparity performance in 2019.

The program is limited to inpatients within a single state; the analysis does not provide evidence on the causal relationship between the intervention and readmission disparities.

This represents the first large-scale effort in the US to link disparities to hospital payment. Because the methodology relies on claims data, it could easily be adopted elsewhere. The incentives are directed to within-hospital disparities, thus mitigating concerns about penalizing hospitals with patients with greater social exposure. This methodology could be used to measure disparity in other outcomes.