Cover-Readmissions

The Billion Dollar U-Turn

By Mark Taylor

Readmissions pose enormous financial and quality of care problems. Hospitals are under intense pressure to do something about them-right now.

cover Hospital readmissions are vexing, a glaring reminder of how poorly integrated—and coordinated—the U.S. health care system can be. They indicate how much room there is to improve the quality of care; in less humane terms, they are a drain on the economy, costing billions of dollars in unnecessary hospitalizations.

And they are now starting to catch a lot of people’s eyes.

Steve Jencks, M.D., sums things up more succinctly: “Readmissions now are a big deal. Big payers are thinking about these problems in very serious ways.”

Jencks, an independent consultant in health care safety and quality and former assistant U.S. surgeon general and director of the Centers for Medicare & Medicaid Services’ Quality Improvement Group, adds, “The most important reason is very simple: Reducing rehospitalizations would both benefit patients and reduce the cost of care, and that combination is not all that frequent, especially when very serious amounts of money are involved.”

Just how much money?

A June 2007 report by the Medicare Payment Advisory Commission estimates that 17.6 percent of Medicare patients discharged from a hospital were readmitted within 30 days in 2005, costing Medicare alone more than $15 billion. Experts estimate that one-half to three-quarters of those admissions could have been avoided. Medicare doled out an average of $7,200 for each of those potentially avoidable readmissions.

Both public and private insurers view rehospitalizations—unplanned admissions to hospitals variously defined as those happening from 30 to 90 days after discharge—as low-hanging fruit that could be plucked to slow the escalating cost of health care. Overall, hospitalizations accounted for 31 percent of the $1.99 trillion spent in 2005 on health care, according to the January 2007 issue of Health Affairs.

Health quality organizations, ranging from the National Quality Forum and Institute for Healthcare Improvement to the federal Agency for Healthcare Research and Quality, have studied measures to judge hospital quality and performance on readmission rates.

MedPac, in its 2007 report, suggests that hospitals publicly report readmission rates as a way to encourage reductions. That move is controversial and opposed by some hospitals, especially those with high-acuity case mixes. And hospital associations say their members are not solely responsible for patients after discharge, noting that nursing homes and other long-term care organizations, home health agencies and individuals themselves share responsibility for patient behavior.

Hospitals face an uphill battle. Some commercial payers already support clinical studies and pilot programs focusing on transitional care and case management models that are designed to improve patient care before, during and after discharges; monitor patient health; and reduce readmissions. Unlike Medicare or Medicaid, which must contract with all willing hospitals, commercial payers can exclude hospitals from their preferred provider networks. And many already track hospital readmission rates.

Some health systems are showing promise in unlocking the complex problem of readmissions, a dilemma with many root causes and numerous providers to share the blame. For example, last year the Fuqua Heart Center at Atlanta’s Piedmont Hospital reported a dramatic 75 percent reduction of 30-day readmission rates for heart failure through use of a telehealth program that monitored patient health status.

Intermountain Health Care in Salt Lake City recorded a 40 percent decrease in heart failure readmissions by implementing Joint Commission quality measures across the system.

But these successes seem to be occurring in isolated pockets, not on a national level. Pennsylvania, which is one of a handful of states that tracks and discloses readmissions, reported that rehospitalization rates rose to 19.1 percent in 2006, up from 18.7 percent in 2004. There were 57,993 readmissions for any reason in 2006, amounting to approximately $2.3 billion in charges and 352,000 hospital days. Interestingly, mortality rates dropped from 4.7 percent to 4.4 percent during the same period.

So, there may not be enough momentum to stave off governmental or private payer mandates.

In its June 2007 report, MedPac recommended that Medicare drive change. Beyond publicly reporting readmission rates, the influential panel suggested that pay-for-performance policies be expanded. MedPac also recommended bundling Medicare Part A and Part B payments for inpatient care, conceding that Medicare does not financially reward initiatives to reduce readmissions.

“Holding each entity accountable will motivate them to collaborate with one another because their success will partly depend on the success of their care partners,” the report states.

MedPac goes further, noting that hospitals can reduce readmissions by providing better care during the original inpatient stay through reducing hospital infections and adverse events. In addition, hospitals should improve discharge processes by reconciling medications, educating patients, scheduling follow-up physician appointments and providing patients with checklists appropriate to their conditions.

Nancy Foster, vice president for quality and patient safety policy for the American Hospital Association, says there are legitimate reasons for some readmissions, such as the ongoing debridement of severe burns. Still, “unplanned or preventable readmissions are clearly indicators that whatever we’re trying to do for patients is not succeeding, or what we did created some undesired complication,” Foster says. “Many unplanned readmissions are the result of someone going home and doing something before they were well enough to do so. We want to prevent those if at all possible.”

Change Is Coming

Herb Kuhn, deputy director of the Centers for Medicare & Medicaid Services, refuses to speculate on when the agency will bundle payments for hospital discharges, but confirmed a payment change will occur. “It’s coming,” Kuhn warns.

There’s also speculation that CMS is looking at whether it can limit or deny payments for unexpected returns and readmissions. “There isn’t 100 percent support for that yet, but payers are moving in that direction, too,” says Steve Mayfield, senior vice president, quality and performance improvement for the AHA and head of the association’s Quality Center. “Patients should expect the right treatment the first time, and unplanned readmissions should be stable, predictable and declining. This is a significant issue on high-performance hospitals’ radar screens.”

Some hospital executives face internal strife when attacking readmissions. “We make money on them,” concedes Gene Diamond, Northern Indiana Regional CEO for the Sisters of St. Francis Health Services in Hammond, Ind. He says incentives currently don’t exist for hospitals to invest in technologies and added staff that would reduce readmissions. Nonetheless, his system has started clinics aimed at reducing complications and improving care for wound care patients, diabetics, asthmatics and heart patients.

“Many of those evolved from concern over readmissions,” Diamond says. “I get a lot of resistance from my finance people and cardiologists, who tell me we can’t afford to do this. But we have to do what’s right for the patient. I want patients here because they need to be here, not because we profit from that. I want us to have complete transparency. We know that Medicare is looking into this, and we don’t want to be perceived as churning patients.”

Shared Accountability

Some of the recent interest in hospital readmissions is spurred by rising health care costs and a desire by payers to pay only for high quality care, not unnecessary do-overs, says Helen Burstin, M.D., senior vice president for performance measures at the National Quality Forum.

“There is concern that high readmission rates speak to issues of continuity of care, of handoffs and transitions. There’s a lot of interest in interventions that could be used to improve those handoffs and transitions. I don’t think it’s an easy solution, but there are some pretty obvious steps you could take,” Burstin says, citing the use of medication reconciliation at hospital discharge to ensure that the drugs patients were taking before their hospitalization still make sense and won’t conflict with the average of three new medications they are prescribed.

“Readmissions are also a good example of how it’s hard to hold one entity entirely responsible for patient care, because you can’t just hold hospitals accountable,” she says. “There are other providers involved here, too, and patients play a role as well. Readmissions are illustrative of where we need to go in our health system: shared accountability.”

Amy Boutwell, M.D., content director for the Institute for Healthcare Improvement, says high rates of readmissions are symptomatic of a broken system. Boutwell says the increase in Pennsylvania hospital readmission rates is not isolated. “That has been a trend nationally,” she says. “One of the real issues is as medical interventions and pharmaceuticals become better at prolonging life, we have more frail, vulnerable and severely ill people presenting more medically complex cases. They may come in for a hip replacement but are readmitted for heart failure or something else. Fueling this are inadequate transitions of care and multiple care providers who don’t communicate well.”

Barry Friedman, an AHRQ senior economist who has analyzed hospital readmissions since 1997, says most states still don’t track readmissions or require public reporting of them, and those that do track it use different standards, making it difficult to draw comparisons.

“We’re not surprised to find there are more adverse events in Medicare and Medicaid populations than in private-payer populations,” he says. “That may reflect greater severity of illness, but it also may reflect that private insurers are more active in selecting preferred hospitals.”

Chronic Problems

Mary Naylor, a nurse and professor of gerontology at the University of Pennsylvania School of Nursing in Philadelphia who has studied the issue for 20 years, is one of a handful of researchers to develop effective case management models. “There’s enormous concern about the growing population of chronically ill adults in this country,” Naylor says. “The increased life span of people coping with multiple chronic conditions is one of the driving forces behind this concern.”

Most chronically ill patients don’t have just one condition, but face multiple conditions of diabetes, hypertension, obesity, asthma, breathing disorders or heart failure. “What we haven’t done is figure out how to manage those care needs,” Naylor says. “Consequently, they end up with big problems and return to the hospital. In our studies, we see the same story repeated: a chronically ill patient readmitted four or five times in a six-month period.”

She believes trained nurses, both advanced practice and bachelor’s-prepared, acting as patient advocates and liaisons across time and care settings, can empower patients and their caregivers to navigate the system, influence care processes and substantially reduce health care costs and readmissions.

When sick patients are discharged, she says, they’re not always ready to hear about their new medications, diet and lifestyle changes. And after returning home, when they do have questions about the treatment plan, there’s nobody to help them. “Our team focuses on the hospital as turning point. We bring in knowledgeable nurses to care for patients and make sure they know how to monitor and manage their care and link in with primary care providers.”

But with a shrinking workforce, nurse shortages and a diminishing pool of caregivers, the health system needs innovative technologies to respond to vulnerable patients’ needs. “And we need the political will to implement them,” Naylor adds.

Payers Seek Solutions

Insurers grappling with high readmission costs are studying reduction strategies to improve care and cut spending. Richard Della Penna, M.D., national clinical leader for geriatrics for Kaiser Permanente, has adopted Naylor’s case management model in several California hospitals, translating basic research into practice.

“In a capitated environment, you have to be able to justify those added costs and cannot make a business case for introducing another layer of care without expecting those cost reductions,” Della Penna says.

Kaiser brought in advanced practice and bachelor’s-prepared nurses to several San Francisco area hospitals to work with Kaiser-covered high-risk patients. While all the data are not yet compiled, “we’re trending in the right direction, Della Penna says. “We’ve looked at 110 cases before and after the program and found lower hospital days. The science and strength of Mary’s [Naylor’s] work are very clear. It behooves us to develop efficiencies in care.”

Randall Krakauer, M.D., chief medical director of Aetna’s consumer segment, says readmissions represent a significant opportunity for synergy. Aetna is implementing a telephonic case management approach to readmissions and is experimenting with merging it with Naylor’s discharge planning model.

The insurer has piloted programs in Philadelphia and Chicago. “It has worked out rather well among the 200 Philadelphia patients,” Krakauer says, noting that Aetna is still tallying data for the 100 Chicago patients. “Patient reaction has been quite favorable: They are grateful for the extra help. And it appears highly likely that it is possible to reduce readmission rates for the first three months after discharge with higher levels of face-to-face engagement. Knowing we can reduce readmission rates really motivates us.”

Post-Acute Partners

Sandra Fitzler, a nurse and senior director of clinical services for the American Health Care Association, which represents 11,000 for-profit and not-for-profit assisted living centers, nursing homes and homes for the developmentally disabled, says some large, multiprovider member organizations monitor readmission rates as part of their own business practices. One of those organizations found that rehospitalization rates rise among some HMO beneficiaries.

“Is it because that company’s members are discharged too soon from hospitals to nursing homes? We know from our providers in Arizona, a managed care state, that the majority of hospital discharges come on Friday afternoons or evenings. That raises the issue: Are the nursing facilities staffed appropriately to handle those discharges? This whole area is wide open and we can’t make any assumptions,” she says.

Mary St. Pierre, R.N., vice president of regulatory affairs for the 3,000-member National Association for Home Care & Hospice, says home care and hospice agencies could play an even greater role in reducing readmissions if more institutions recognized the breadth of services they provide.

“One of those is patient and family education, empowering both to avoid complications and keep patients from returning to the hospital,” St. Pierre says.

She says home care providers have some control over patients after they’ve been discharged from hospitals. “But we operate under the orders and directions of physicians and are required to report any potential problems when they occur. Often when that happens, the physician’s nurse tells us to send patients to the emergency room, after which they are usually hospitalized. We need to communicate better with physicians to present practices and protocols that can prevent such problems before the patient is sent to the ER.” —Mark Taylor is a writer in Hammond, Ind.

This article 1st appeared in the May 2008 issue of HHN Magazine.

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