To improve our patients’ health, look beyond reducing readmissions
HOW MANY READMISSIONS ARE TRULY PREVENTABLE?
Experts disagree on how many readmissions are truly preventable. Readmission rates for the sickest patients treated at tertiary or academic medical centers may reflect high-quality care in well-managed patients who otherwise would have died during the index admission.8
In early studies, the Medicare Payment Advisory Commission estimated that up to three-quarters of readmissions are preventable.9 In contrast, studies that used clinical instead of administrative data suggest preventable readmissions make up as little as 12% of total readmissions.10
Regardless of the actual percentage, Medicare’s risk-adjustment model relies exclusively on administrative data that do not fully account for nonpreventable factors and do not completely address unrelated or planned rehospitalizations. CMS is attempting to address these issues with an expanded readmission algorithm that excludes more planned and unrelated readmissions from the penalty calculation.
Ironically, the current structure of the Readmissions Reduction Program does little to address its intended goal of eliminating the perverse financial incentives for hospitals and physicians to readmit patients. Payments are still episode-based and reward readmissions. The $280 million that CMS expects to receive from the program this year covers less than 5% of the nearly $12 billion attributed to preventable rehospitalizations.11
WHAT PATIENTS NEED, NOT WHAT SUITS PROVIDERS
Hospital readmission rates are publicly reported, but it is shortsighted to think about readmissions outside of the broader context of the “medical home.” One must consider the role of primary care providers before and after an index admission in addition to the role of postacute care providers for some patients after discharge. Neither is directly affected by the current penalty program, but both are critical to effective solutions and optimizing value-oriented care.
Readmission rates are suboptimal measures, as they address presumed failures of hospital transitions rather than measuring care coordination and providing meaningful incentives to coordinate care. Yes, there is much to do to ensure effective transitions from the hospital to home or postacute settings. But to truly transform health care and deliver value, shouldn’t we strive to redesign the work flow around what patients need rather than what suits providers?
This effort should focus on managing the conditions that bring patients to the hospital. Medical homes and optimizing chronic disease care can play pivotal roles in improving quality and reducing costs. Coordination of care and disease-management programs have led to cost reductions of 30% or more12 and have reduced admission rates by more than 10%.13 While the nation waits for health care reimbursement models to better reward patient quality outcomes and population health while reducing costs, we can use measures such as the Agency for Healthcare Research and Quality’s Prevention Quality Indicators to identify early interventions in the ambulatory care setting that can prevent admissions, complications, and exacerbation of disease.
Payers should also experiment with and promote innovative bundled-payment models such as Geisinger Health System’s ProvenCare program, which sets a fixed price for surgical procedures and up to 90 days of posthospital care, including readmission. These warranty-like programs overcome financial incentives to readmit patients in Medicare’s volume-based diagnosis-related group payment system.5
Re-engineering the delivery of care requires realigning resources to improve efficiency and effectiveness. In the short term, hospitals that successfully reduce readmission rates can expect reduced net reimbursements, as the penalties currently do not exceed the lost revenue of readmissions.
Reducing preventable readmissions is the right thing to do, but not all hospitalizations and rehospitalizations are avoidable. Many readmissions reflect appropriate and necessary care. The relentless focus on the readmission rate diverts attention and resources from more proactive solutions and innovative approaches for increasing health care safety, quality outcomes, and value.
Hospitals are caught between the volume and value paradigms. Payment programs that reward proactive disease management and care coordination will do the most to reduce health care costs and improve the quality of care. Hospitals have a responsibility to efficiently and effectively manage acute care and optimize handoffs to the next provider. Medicare’s payment policies do not do enough today to align the financial and quality-of-care incentives.
