An Analysis of the Factors Driving Hospital Readmissions, and the Potential for Coordination Games Under the Medicare Readmissions Reduction Program

Open Access
Author:
Rizzotti, Matthew James
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Russell Wade Cooper, Thesis Supervisor
  • Russell Paul Chuderewicz, Honors Advisor
Keywords:
  • economics
  • Obamacare
  • hospital
  • health
  • coordination
  • game theory
  • Affordable Care Act
  • Readmission Reduction Program
Abstract:
The Medicare Readmissions Reduction Act is a new piece of legislation designed to improve the quality of medical care provided to Medicare patients throughout the nation. This legislation is designed to provide Medicare patients with a higher quality of care, but in practice can lead to a coordination game between a hospital and their patients, and between different healthcare facilities. Multivariate regression was employed to isolate the socioeconomic and hospital factors which most contribute to readmissions. It was found that population size and diversity, crime rate, number of admissions from the emergency department, and the availability of nurses at long term care facilities all drive the readmission rate. Given this, analysis of the coordination game demonstrates that the legislation may incentivize hospitals to reduce care in some circumstances. Changes are proposed to improve the quality of the legislation and to remove these negative incentives before patient care is impacted too strongly.