Business Matters

CMS' Stealth Health Reform

By Molly Joel Coye, M.D.

A plan to reduce readmissions and boost the continuum of care

While the debate on health reform rages, the Centers for Medicare & Medicaid Services has quietly introduced a new policy that will reshape U.S. health care by breaking down the walls between hospitals and care delivered in the community. By announcing that Medicare will require reporting of readmissions within 30 days of discahrge for patients with three major diagnoses, and that CMS is considering modification or denial of reimbursement for such diagnoses in the future, CMS has posed the critical question for integrated care: What can we do before we send a patient home, in the transition itself and in home-based care to prevent the “revolving door” of patients bouncing back into the hospital?

Integrating care, moving it into the community and reducing preventable admissions are key reform goals. CMS’ policy is an early sign of the shift to paying for better care of chronic conditions across the continuum. CMS also is determined to recoup some of the $15 billion it spends on readmissions each year.

In 2009, hospitals will be required to report heart failure, pneumonia and acute myocardial infarction readmissions within 30 days of discharge. Beginning in 2010, reimbursement for these readmissions may be modified or denied. Heart failure and pneumonia rank first and second and AMI eighth among all causes of Medicare discharges. A typical 250-bed hospital faces a loss of annual reimbursement of about $1.5 million. For CMS, readmissions are an indictor of quality failure, and Medicare Payment Advisory Commission reports that as many as 75 percent of all readmissions are potentially preventable.

For hospitals and hospital-based integrated systems, decisive action is needed now. The challenge can be met by a swift, focused application of innovative system changes backed up by technologies that address labor costs, continuous information feeds about patient status, and clinical protocols to drive efficient, evidence-based management of often complex patients at home.

Even the best nurses and discharge planners routinely miss subtle cognitive impairments that will make it difficult for patients to manage medications and care for themselves at home. The first sets of technologies that reduce readmissions, therefore, begin pre-discharge. During the move home and the first few days thereafter, key innovations use information technology and devices to manage medication reconciliation, speed the connection to home care and community physicians, and identify challenges in the home setting. Over the following weeks, remote video systems and even simple telephone-linked monitoring and coaching technologies can maintain surveillance, offer prompt interventions and enhance home care agency productivity by as much as 250 percent.

Some of HealthTech’s case studies of early innovators found that hospital systems have essentially eliminated readmissions and cut ED visits by more than 50 percent. Other approaches targeting chronic disease management have consistently cut ED use and hospitalizations by 40 percent to 70 percent. Many of the most successful hospital-based approaches use home care agencies to manage the transitions and community care, in a financial model that is a win for both the home care agency and the hospital.

Molly Joel Coye, M.D., is CEO of the Health Technology Center in San Francisco.

You can contact our guest author at mcoye@healthtech.org

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

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