At a recent meeting, I was asked about the best areas for new service line investments. My answer – “any program that keeps high-needs complex consumers out of institutional settings.” The rationale is simple – a small proportion of consumers use a high proportion of health care resources (see Five Percent of Americans Responsible for Half of U.S. Health Spending, Costs of Complex Consumers Dominate Health Policy Concerns, and The Marketing Challenge Of The 5% & The 95%). And, of the total $2.8 trillion health care budget, 17.7% is spending on inpatient care. Readmissions cost Medicare $17.5 billion (in 2010) – and each psychiatric readmission costs on average $7,494.
That is why readmission rates are one of the most important measures of performance – from both a clinical and a financial perspective. There has been lots of press about the federal Centers for Medicare and Medicaid Services (CMS) program to adjust hospital fees based on their readmission rates (see It Looks Like The Feds Are Serious About Readmissions and Payment Policy For Inpatient Readmissions). Medicare reimbursements are being reduced by 1% for those hospitals with high 30-day readmission rates for patients with heart attack, heart failure, or pneumonia.
What do these readmission rates look like? The data is available through the Hospital Compare web site. A quick check of my local hospital, the Gettysburg Hospital, found their readmission rates:
17.8% readmission rate for heart attack patients (U.S. national rate, 18.3%)
24.4% readmission rate for heart failure patients (U.S. national rate, 23.0%)
19.4% readmission rate for pneumonia patients (U.S. national rate, 17.6%)
14.9% readmission rate after discharge, hospital-wide (U.S. national rate, 16.0%)
While readmission rates certainly have the attention of hospital administrators, readmission rates should be of concern to any organization in the health and human service field. First, there is the likelihood that CMS will expand the current readmission penalty program to more diagnostic groups (see Acute Inpatient Prospective Payment System & Long-Term Care Hospital Prospective Payment System Final Rule). And, there was a recent recommendation to extend the readmission penalties to home health and hospice benefit for Medicare Advantage (see MedPAC endorses readmissions penalties for home health, hospice benefit for Medicare Advantage), and to nursing homes (see Nursing Homes May Face Readmission Penalties Similar to Hospitals).
Finally, in an era of value-based reimbursement, readmissions matter. Pay-for-performance models often incorporate readmissions (and admissions) into the formula (such as the California P4P Program, the Integrated Healthcare Association (IHA) Measure Set, and the IHA Value Based Pay for Performance in California). And readmissions are critical to the financial viability of risk-based contracts. Readmission rates are not just the concern of hospitals any more.
To read more, see: Readmissions Rates A Lightning Rod For Field