Improving the US hospital reimbursement: how patient satisfaction in HCAHPS reflects lower readmission

Purpose: The purpose of this paper is to examine whether patient readmission rates are associated with patient satisfaction and Medicare reimbursement rates in the US hospitals.

Design/methodology/approach: The Hospital Compare database was obtained from the Centers for Medicare and Medicaid Services (CMS) in the US. A total of 2,711 acute care hospitals were analyzed for this present study. The data included patient satisfaction surveys, hospital 30-days readmission ratios for heart failure and pneumonia patients and related payments. Exploratory factor analysis was applied in the first stage to operationalize constructs for scale development. Partial least squares (PLS) modeling analysis via Smart-PLS was utilized for testing the hypotheses.

Findings: Results indicated that data provided from the Hospital Compare database for the acute care hospitals accurately reflect quality outcomes. Nevertheless, the Medicare Hospital Readmissions Reduction Program (HRRP) did not penalize the hospitals when patients reported lower satisfaction via the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores.

Originality/value: The findings suggest that a high-readmission rate is not associated with lower payment. Such results appear to conflict with the goals of value-based purchasing programs, which seek to penalize hospitals financially for higher readmission rates.