Today’s Wall Street Journal has a noteworthy piece by Laura Landro on reducing hospital readmissions as a way to improve quality and lower costs. Click here for the piece (subscription required). Here are a few excerpts:
A revolving door of readmissions is driving up costs for hospitals and causing needless harm to patients, especially elderly people with multiple chronic diseases. Nearly 18% of Medicare patients admitted to a hospital are readmitted within 30 days of discharge, accounting for $15 billion in spending, according to the Medicare Payment Advisory Commission, the independent federal body that advises Congress on Medicare. As a result, readmission rates are coming under increasing scrutiny from regulators, insurers, employers and quality-measurement groups, who are considering methods to tie payment to lower readmissions.
There are about five million readmissions a year in U.S. hospitals, with approximately a third occurring within 90 days of discharge, according to the Institute for Healthcare Improvement, a Boston-based nonprofit. But with so-called transitional-care programs, which follow patients for varying periods of time at home, as many as 46% of readmissions could be prevented, says Pat Rutherford, an IHI vice president.
Part of the problem is that hospitals aren’t paid to coordinate care once a patient leaves. But that may change: Large managed-care groups and insurers are now experimenting with programs to cover such services. Both Aetna and Kaiser Permanente, the California-based managed-care giant, are working on pilot programs based on Dr. Naylor’s model. Her studies show that discharge planning and home-care services for at-risk hospitalized elderly patients can reduce readmissions, lengthen the time between discharge and readmission, and cut the cost of providing care.
We would note that changing hospital financial incentives to reduce unnecessary hospital readmissions is part of the HCFA cost control agenda we created earlier this year and included in our cost control legislation sponsored by Sen. Mark Montigny and Rep. (now Senator-elect) Jim Marzilli. Click here for our cost control report. See recommendations B3 and B4.
There are good and new ideas out there under the sun. We have some of them. Even the Wall Street Journal seems to agree.
This is a response from Dr. Norb Goldfield, a Western Mass. physician who works at 3M Consulting, and Brightwood Community Health Center in Springfield. He’s also a member of HCFA’s Board of Directors, and helped us formulate our cost control agenda, especially on preventing hospital readmissions:
Research literature documents that readmissions occur because of any combination of the following factors:
a. clinical care in the original hospitalization,
b. discharge hospital planning including coordination with outpatient health care system, and
c. outpatient care including the primary care physician, patient, family
The closer the readmission is to the initial hospitalization (e.g. 15 days as opposed to 30), the more likely is the readmission to be due to clinical care/ discharge planning.
It is key to provide financial encouragement to the hospital NOT by denying payment for readmission (as, for example, CMS did with their new policy on complications) but rather to compare readmission rates between hospitals. Thus if one hospital in Boston has a readmission rate of 15% and another hospital in Boston has a 10% rate, one would want to design a policy that encourages both hospitals to improve.
We should NOT penalize one hospital.
Mr. Levy asks an important question regarding home care and hospital ownership of these services. A financial incentive to improve (i.e.
decrease) readmissions will result in
a. Better quality of hospital care
b. Better communication between the hospital and outpatient setting, including discharging patients on medications covered by the patients insurance plan.
c. Better understanding of how to avoid readmissions on the part of the patient/family/caregiver
d. Perhaps most important, OVER time encourage development of new processes of care to link inpatient and outpatient settings. NO ownership is necessary.
When DRGs – the hospital inpatient payment system for most payers – were implemented, physician practice patterns changed without the hospital having control over physicians, home care services etc.
Hospital boundaries today are not the four walls of the hospital. Similar to what we did with DRGs, we need to encourage (with positive financial incentives) hospitals to lead the way on decreasing readmission rates – something all consumers can embrace
Any incentive to decrease readmissions should use a methodology that identifies those readmissions that are potentially preventable. We should all work collaboratively on the low hanging fruit! This will have a positive result on all readmissions.
Thanks, John. I didn’t take it so much as pointing fingers at hospitals — even though sometime we hospitals need finger pointing! — as to raise the different context in CA from what we have here, etc. I think it is really, really important and valuable that you keep pushing these issues and raising questions.
Paul:
Great responses, thank you. I’m asking our expert advisor on this to respond as well. He’s out of the country right now so it may take a little time.
We’re not trying to point fingers at hospitals. We’re trying to say there’s something wrong with a system that does not incentivize providers to focus on preventing readmissions. Recognizing it’s not possible to get them to zero, we also strongly believe it’s possible to get them much lower than they are now — improving patient quality of life and saving dollars. A win/win.
Hospitals aren’t the problem here, they are the biggest part of the solution. It’s a wacky and stupid financing system that’s the problem — and that’s what we suggest needs fixing.
More to come…
John McDonough
As you note, hospitals generally are not paid for home-care services in MA. That is in the purview of other health care providers. Ditto, when a patient is discharged to a skilled nursing facility or a rehab hospital. In MA, those organizations are separate corporations, subject to their own payment rules.
It is one thing to ask hospitals to do all they can to reduce readmissions that result from their own patient care decisions. No one can argue with that. But readmissions can also occur because of the type of care patients receive once they leave the hospital and are under someone else’s care.
How do you propose to allocate the “blame” for an unnecessary readmission in this kind of ownership and reimbursement pattern? In CA, there is a broader managed care environment in which Kaiser Permanente might have “ownership” of a patient through the whole continuum of care. That doesn’t exist in this state.
Are you propoing the establishment of integrated health care delivery systems with a soup-to-nuts range of service — from primary care through hospitalization through rehab and skilled nursing and hospice? Are you further proposing a capitated form of reimbursement spanning this continuum of care?
(Also, you will need to have integrated electronic medical record cabability between the hospitals and the SNFs and Rehab hospitals. A very worthwhile thing in any case, but it does not exist now.)