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blog post 07.21.14

Four More Things to Know About Readmissions

This blog post excerpts an article by Robin L. Rose, MBA, Vice President, Healthcare Resource Group, HealthStream, in the Q3 2015 issue of PX Advisor, our quarterly magazine designed to bring you thought leadership and best practices for improving the patient experience. 

  1. Hospitals can make improvements to reduce readmission rates.

    Studies have shown that there are a number of processes that occur during the inpatient stay and in the early stages of post-discharge care that do impact readmission rates. Most hospitals are focusing their improvement efforts in these areas. The following table identifies some of these common process breakdowns.

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  2. Skilled Nursing Facilities (SNFs) are next.

    Research has shown that the density and quality of SNFs in a county has a significant impact on hospital readmission rates (Herrin, 2014). Roughly 40% of hospital inpatients are discharged to some type of post acute facility, with roughly half of these discharges going to a SNF (AHRQ, 2009). Recent analyses indicate that 23.5% of Medicare beneficiaries who are discharged from a hospital to a SNF are readmitted to the hospital within 30 days, at a cost to Medicare of $4.34 billion (Mor et al., 2010). Mor comments that, “These rehospitalizations have been shown to be frequent, costly, and often preventable,” (Mor et al., 2010).

    To address the substantial impact that SNFs have on hospital readmissions, CMS is planning to roll out a readmissions reduction program targeting skilled nursing facilities. The Protecting Access to Medical Care Act of 2014 includes a value-based purchasing (VBP) program for SNFs. Beginning in October 2018, CMS plans to institute financial incentives that link Medicare payment rates to performance standards in order to hold SNFs accountable for their readmission rates. It is expected that the VBP program will provide a catalyst for SNFs to address long time staff turnover and development challenges and to seek better data sharing between hospitals, SNFs, and primary care providers.

  3. End of Life Planning has a tremendous impact on readmissions.

    Use of hospice and palliative care services during the last phase of life can greatly reduce the need for hospitalization during this time period. Research has shown that use of these end-of-life services can reduce hospitalizations in the subsequent 30 – 180 days by 40-50% and allow patients to spend on average 10 fewer days in the hospital during their last two years of life than those without such planning (Kowalski, 2015).

    The challenge is that most patients who are discharged from the hospital fail to receive the education and planning necessary for end-of-life care. Studies have shown that there are low rates of referral for hospice and palliative care, although these services can lead to a substantially higher quality of life for the patients who receive this care. In 2012, an estimated 1.54 million patients received hospice services, up from 1.25 million in 2008 (NHPCO, 2013).

  4. There are concerns about the design of the HRRP.
    Now that we have some history with the HRRP, we can analyze and learn from the results. First and foremost, we are seeing a drop in hospital readmission rates. Medicare all-cause readmission rates had held stubbornly around the 19% mark from 2007 to 2011, before dipping to 18.5% in 2012 and then to 17.5% through the end of 2013 (McKinney, 2014). However, there may also be some unintended consequences or areas of concern associated with the program.
  • As noted earlier, hospitals with a higher percentage of low income patients are paying the highest penalties—often millions of dollars. By paying these penalties, is there a negative impact on their ability to deliver quality patient care?
  • CMS penalties are assessed on all Medicare admissions, not just those that result in unnecessary readmissions, so that there is an imbalance between the total penalty amounts and the actual cost to CMS for the readmissions. Is CMS taking financial advantage of hospitals in an effort to reduce their own costs?
  • Some perceive the hospital readmission rate to be a proxy for hospital quality; however, is this valid given that only about 40% of readmissions may be preventable by measures that hospitals directly control?
  • Hospital readmissions may account for a significant proportion of the hospital contribution margin. Will the HRRP be effective for hospitals where the penalty is less than the marginal profit from these readmissions or less than the incremental cost of reducing readmissions?
  • Under a fee-for-quality model, hospitals are incentivized to reduce admissions. However, fewer admissions can cause the hospital readmission rate to be higher. Do these conflicting objectives cause a dilemma for hospital executives?

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