代写MSBA 7004、代写Python程序

日期：2022-10-31 09:09

MSBA 7004 Operations Analytics

Group Assignment – Hospital Readmission Reduction Program

Patient readmissions—return visit to a hospital—is widely viewed as a negative sign for quality

of health care. In the United Sates, since 2012, hospitals with excessive 30 day readmissions

have been penalized under the Hospital Readmissions Reduction Program (HRRP) as

mandated by the Affordable Care Act (ACA). The HRRP aims to incentivize hospitals to

embrace efforts to reduce readmissions through improving patient care quality and transitions.

In general, the HRRP penalizes hospitals for excessive readmissions by adjusting

Medicare (a type of government funded insurance) payments based on a ratio of excess

readmissions. In fiscal year 2015, more than 2,610 hospitals were penalized a total of

approximately $482 million for excess readmissions.

Despite these penalties, hospitals with excess readmissions may face the prospect of

losing revenue from overall reduced inpatient volume from efforts to reduce readmissions.

With the high proportions of patients being readmitted, these readmissions constitute a

significant amount of Medicare revenue to these hospitals. This dilemma of avoiding the

readmissions penalty versus the potential cost of reducing hospital volume and associated

revenue may attenuate enthusiasm for readmission reduction efforts.

You are asked to examine through financial modeling the financial incentives of

hospitals to engage in readmissions reduction efforts, considering both the HRRP penalty and

the potential of loss of revenue from lower hospital patient volume. Specifically, you are asked

to model hospitals as net income maximizers and link operational parameters to hospital

financials.

According to the HRRP guideline, a hospital’s excess readmissions penalty calculation

is based on a risk-adjusted performance metric as the Excess Readmission Ratio, which is equal

to Risk-adjusted Predicted Readmissions (RPR) divided by Risk-adjusted Expected

Readmissions (RER). RPR can be viewed as a hospital’s actual readmissions performance

measure, while RER represents the benchmark (target) performance measure to which a

hospital’s RPR rate is compared. RER is an estimation of expected readmission performance

of a national average hospital subject to the HRRP with the same patient risk factors as the

evaluated hospital.

MSBA 7004 2022 Module 2

If the hospital’s Excess Readmission Ratio exceeds 1, it incurs a financial penalty

proportional to the level of excessiveness (Excess Readmission Ratio - 1) multiplied by the

Centers for Medicare & Medicaid Services (CMS) payment for Medicare patients. However,

the total readmissions penalty is limited to a maximum equal to a predetermined percentage of

total Medicare payments the hospital receives for treatment. Within the HRRP policy the

penalty cap is operationalized as being equal to 1 – Floor Adjustment Factor (FAF). Under the

current structure, this penalty cap is set at 3% (FAF 0.97). Thus, a hospital receiving the full

3% penalty would receive payment equal to 97% of full possible Medicare payments.

Make the following assumptions to analyze whether a hospital would be incentivized to reduce

readmissions:

1. Hospitals are revenue maximizers.

2. Do not consider the cost of reducing readmissions. (In reality, hospitals will have to

make improvements/changes to their process to reduce readmissions which will cost

them. We will not model these cost components in our analysis, but it should certainly

be considered by the hospital manager when she is making a reduction decision.)

3. Hospital revenue is proportional to the patient volume.

4. Hospitals have two type of patients by whom they receive payment from: Medicare

patients and private patients which hospitals are paid by CMS and private insurers

respectively.

5. HRRP only affects Medicare payments and not private payments.

6. The payment amount (revenue) per patient is identical for Medicare and private

patients. (Hint: Revenue can be normalized as a function of only patient volume and

penalty structure. Exact payment per patient is not necessary for analysis.)

7. Readmission performance, RPR, is identical for both patient types.

8. If a hospital decides to reduce readmissions, it will not cherry pick and only reduce

CMS patients. In other words, the hospital will reduce readmissions for both patient

types in equal proportions.

9. A hospital will not intentionally increase readmissions.

MSBA 7004 2022 Module 2

Questions

1. Mathematically state the objective of the hospital as a function of the relevant factors.

2. Graph hospital 50158 and 50245’s normalized revenue as a function of readmission

rate. And analyze whether the hospitals would be incentivized by the HRRP to reduce

readmissions.

3. Assess the effectiveness of HRRP: analyze all 183 hospitals and report the

effectiveness of HRRP in incentivizing hospitals to reduce readmissions. Visually

present your findings in the most efficient way with managerial insights.

Report format:

For question 2, describe when a hospital is incentivized to reduce readmissions by the HRRP

penalty. Report the two graphs and provide a concise description of your finding and compare

the two hospitals. For question 3, submit the data file by appending a new column indicating

whether a hospital is incentivized or not. Hint for visualizing your findings: what are the key

parameters that affect hospital decisions. In the report, provide a summary of your findings

including the percentage of hospitals incentivized to reduce readmissions. Strict 4-page limit

excluding title page and appendix. Attach Python code in appendix. No other coding language

is allowed. Do not write the questions. Peer evaluation scores will be collected, and free riders

will be penalized accordingly.

Data Dictionary:

1. County: County the hospital is located in.

2. HospitalID: Hospital identifier.

3. MedicareFr: Fraction of Medicare patients

4. RPR: Risk-adjusted Predicted Readmissions (in percentage)

5. RER: Risk-adjusted Expected Readmissions (in percentage)