Risk Adjusting for Social Determinants of Health at Children's Hospitals

Risk adjustment for social determinants of health could reduce penalties to children’s hospitals for patient factors that are beyond their control, according to the results of a new study published in JAMA Pediatrics.

Using readmission rates as the basis of pay-for-performance (P4P) penalties has generated controversy, especially with respect to the extent that readmissions reflect hospital quality. The CMS Hospital Readmission Reduction Program reduces payments to hospitals with excess 30-day Medicare readmissions, and now some state Medicaid programs will use readmission penalties for hospitals with excess pediatric readmissions based on rates of Potentially Preventable Readmissions (PPR), which are also calculated using risk-adjustment factors.

The goal of using risk adjustment is to help distinguish quality of patient care from the effects of patient characteristics that are not under the control of the clinician. However, the risk-adjustment factors permitted by CMS for its hospital readmission penalty program include sex, age, comorbidities, and medical frailty, but not social determinants of health (SDH), such as race, ethnicity, education, income, and payer. Since SDH are shown to be risk factors for readmissions-related penalties for children’s hospitals, risk adjustment for SDH may reduce penalizing hospitals for patient factors beyond their control.

Marion R. Stills, MD, MPH, of the University of Colorado School of Medicine, and colleagues investigated the effects of SDH risk adjustment on P4P measurements in children’s hospitals by comparing baseline and SDH risk-adjusted PPR rates to see whether adjusting for SDH could affect the P4P penalty status of a national sample of children’s hospitals. Their retrospective cohort study of 179,400 discharges from 43 hospitals showed that risk adjusting the readmissions measure for SDH changed the penalty status of 7.0% and 11.6% of hospitals using 15-day and 30-day readmission windows.

The authors compared a baseline model adjusted for severity of illness and an SDH-enhanced model that adjusted for severity of illness and four SDH variables: race, ethnicity, payer, and median household income for the patient’s home zip code. For the 179,400 discharges meeting inclusion criteria, median hospital-level percentages for the SDH variables were 39.2% nonwhite, 17.9% Hispanic, and 58.7% publicly insured. The hospital median household income for the patient’s home zip code was $40,674.

The investigators concluded that risk adjustment for SDH changed hospitals’ penalty status on a readmission-based P4P measure.

“Without adjusting P4P measures for SDH, hospitals that care for more vulnerable patients may receive penalties in part related to patient factors beyond the control of the hospital and unrelated to the quality of hospital care,” the authors concluded.