Do discharge incentives in emergency departments lead to higher readmission rates?

In an effort to address emergency department overcrowding, pay-for-performance incentive programs have been implemented in various regions around the world, including hospitals in Metro Vancouver. But a new study from the UBC Sauder School of Business shows that while such programs can reduce barriers to access for admitted patients, they can also lead to patient discharges associated with return visits and readmissions.

The study looked at over 800 000 patient visits to the four major emergency departments in Metro Vancouver over a 3-year period from 1 April 2013 to 31 March 2016. The study focused on patients with higher acuity levels (triage level 1, 2, or 3). During the first year of the study period, two pay-for-performance incentive programs were in effect, funded by the BC provincial government: emergency departments received a $100 compensation for each discharged patient with a length of stay of less than 4 hours. Emergency departments also received a $600 compensation for admitted patients who spent less than 10 hours in the emergency department.

The government terminated both pay-for-performance programs on 31 March 2014; however, the regional health authority governing all four emergency departments studied decided to internally fund the exact same $600 admission incentive scheme, which continued without interruption. Only the $100 discharge incentive completely disappeared after the government pay-for-performance program was terminated.

“In the past, the extent to which these types of programs affected the length of stay of individual patients was not well understood because previous studies have only examined aggregate performance metrics as they relate to length of stay,” says Yichuan (Daniel) Ding, study co-author and assistant professor in the Operations and Logistics Division at the UBC Sauder School of Business. “Our study took a much more granular approach, where we focused specifically on patient discharges that took place within 20 minutes of the deadline for the incentive, because we wanted to know if these patients were discharged to catch the deadline.”

The study found that for those patients who were discharged home, there was a significant discontinuity around the 4-hour mark, meaning that there was a significant number of patients who were discharged right before the 4-hour mark. But after the 4-hour mark, there was a decreasing likelihood that a patient would be discharged. This phenomenon was observed in only two of the four emergency departments; the other two did not exhibit this same discontinuity.

“Our study confirmed that this type of financial incentive altered system performance. And in the positive sense, that means that the program is effective because it impacts length of stay for both discharged and admitted patients,” says Eric Park, study co-author and assistant professor in the Faculty of Business and Economics, University of Hong Kong. “But when we looked more granularly at the patients who were discharged within 20 minutes before the deadline, we found that one of the four emergency departments had a greater revisit and readmission rate within 7 days—meaning that within 7 days, those patients are more likely to come back and be admitted to hospital. It is possible that this is a signal of premature discharge.”

“However, we cannot assert that discharge is premature using this metric alone, especially given that it was only observed in one of the four emergency departments, but it is a potentially worrisome finding,” adds Yuren Wang, study co-author with the National University of Defense Technology in Changsha, China.
The study also found that for the case of admitted patients at the 10-hour mark, the discontinuity was even more significant, and it applied to all four emergency departments, not just the two.

“Our recommendations based on this research are that setting an incentive for admitted patients improves length of stay, but the 4-hour benchmark for discharged patients should be implemented with care,” says Dr Garth Hunte, study co-author and emergency physician at St. Paul’s Hospital in Vancouver. “There is no sense for an incentive to discharge patients that may require admission to hospital.” This is consistent with what the hospitals are actually now doing, due to the regional health authorities’ ongoing funding of the admission incentive.

The article “Do Financial Incentives Change Length-of-stay Performance in Emergency Departments? A Retrospective Study of the Pay-for-performance Program in Metro Vancouver” is available in the journal Academic Emergency Medicine.