To determine whether a government program is successful, it’s often necessary to look not only at how well it does what it’s supposed to do, but what it’s doing that it isn’t supposed to. For example, killing people.
Take the hospital readmissions program built into Obamacare. The program derived from a simple observation that hospitals were treating lots of people who would then return for more treatment within the month. Unnecessary readmissions cost Medicare an estimated $17.5 billion a year. If hospitals were treating people effectively, the thinking went, those people shouldn’t need to return so soon.
So the health law instituted a Medicare payment penalty for hospitals with too many readmissions for pneumonia, heart failure, and heart attack. Since 2012, Medicare has assessed about $2 billion in penalties on hospitals with too-high readmissions rates.