George Mason UniversitySchool of Business

Using Process Management to Examine Unintended Consequences of Health Care Regulation

Written by Robert Appel on .

Hang Ren v2

In his research, Hang Ren, an assistant professor of information systems and operations management, is investigating whether a 2012 federal regulation called the Hospital Readmissions Reduction Program (HRRP)—intended to improve patient care in hospitals by targeting readmissions for six targeted diagnoses or treatments—is fundamentally flawed in reducing readmissions or improving patient care.

Ren’s research, which he is conducting with colleagues Tolga Tezcan from the London Business School and Kenan Arifoglu from University College London, is under review at the prestigious peer-reviewed journal Management Science.

HRRP reduces overall Medicare reimbursement to hospitals by up to 3 percent if a hospital’s readmissions rates for six targeted diseases and treatments—acute myocardial infarction, chronic obstructive pulmonary disease, heart failure, pneumonia, coronary artery bypass surgery, and hip and knee replacement—are above the national average.

The research, “Hospital Readmissions Reduction Program Does Not Provide the Right Incentives: Issues and Remedies,” uses analytical modeling developed in process-management scholarship to project the potential for HRRP to achieve the goals government regulators intended.

“It’s not unusual for government to use a very blunt instrument to try to influence a complex issue,” says Ren. “We are concluding that the financial penalties HRRP creates don’t provide a meaningful disincentive for correcting high readmission rates and fail to provide meaningful incentives for improved performance.”