Don't let go of the rope: reducing readmissions by recognizing hospitals' fiduciary duties to their discharged patients

In the early years of the twenty-first century, it was widely speculated that massive, multi-purpose hospitals were becoming the "dinosaurs" of health care, to be largely replaced by community-based clinics providing specialty services on an outpatient basis. Hospitals, however, have roared back to life, in part by reworking their business model. There has been a wave of consolidations and acquisitions (including acquisitions of community-based clinics), with deals valued at $7.9 billion in 2011, the most in a decade, and the number of deals increasing another 18% in 2012. The costs of hospital care are enormous, with 31.5% ($851 billion) of the total health expenditures in the United States in 2011 devoted to these services. Hospitals are (1) placing growing emphasis on increasing revenue and decreasing costs; (2) engaging in pervasive marketing campaigns encouraging patients to view hospitals as an all-purpose care provider; (3) geographically targeting the expansion of their services to "capture" well-insured patients, while placing greater pressure on patients to pay for the services delivered; (4) increasing their size, wealth, and clout, with two-thirds of hospitals undertaking renovations or additional construction and smaller hospitals being squeezed out, and (5) expanding their use of hospital-employed physicians, rather than relying on community-based physicians with hospital privileges, and exercising greater control over medical staff. Hospitals have become so pivotal in the U.S. healthcare system that the Patient Protection and Affordable Care Act of 2010 (PPACA) frequently targeted them as a vehicle to enhance patient safety and control escalating health care costs. One such provision--the Hospital Readmissions Reduction Program, which goes into effect in fiscal year 2013--will reduce payments ordinarily made to hospitals if they have an "excess readmission" rate. It is estimated that adverse events following a hospital discharge impact as many as 19% of all discharged patients. When hospitals and similar health care facilities fail to adequately manage the discharge of their patients, devastating medical emergencies and sizeable healthcare costs can result. The urgency to better manage these discharges is compounded by the fact that the average length of hospital stays continues to shorten, potentially increasing the number of discharged patients who are at considerable risk of relapse. Also exacerbating the problem is a lack of clarity rega