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When Medicare “Cuts” are Medicare “Savings”

In a post titled “Slowing Down that Revolving Readmissions Door” the New America Foundation’s Joanne Kenen writes about avoidable readmissions. “I once interviewed a patient who literally could  not remember how often he had been hospitalized within just a few months,” Kenen recalls, referring to a story published in the Washington Post last year.

There, she reported that “one of five Medicare hospital patients returns to the hospital within 30 days–at a cost to Medicare of $12 billion to $15 billion a year—and by 90 days the rate rises to one of three, according to an analysis of 2007 data by Stephen Jencks.”  Within a year, two out of three are back in the hospital—or dead—says Jencks who consults on this issue for the Institute for Healthcare Improvement (IHI).

This is money that health care reformers could use as we expand care to the uninsured. It’s worth noting that what many call “Medicare cuts” are really “Medicare savings”—billions that could be reclaimed if we rescued patients from that revolving door.
Under reform legislation, hospitals with particularly high rates of avoidable readmissions will have Medicare payments reduced, beginning in 2011. I would guess that some private insurers will follow Medicare’s lead.

Going forward, Medicare will be using financial carrots as well as sticks. When it  begins “bundling” payments to hospitals and the doctors who treat the patient before he enters the hospital, while he is there, and after he is discharged, hospitals and doctors will have a greater reason to collaborate, and will share in the savings when smooth transitions lead to fewer re-admissions.

But do we know how to avoid readmission?

Kenen reports on a study which  provides more medical evidence showing that, indeed, we do know how to reduce high readmission rates among the million or so Medicare patients with heart failure who are hospitalized each year. Drawing on data from more than 30,000 Medicare patients, the study found that hospitals that follow up for a week after discharge bring down the hospitalization rates significantly. The study drew on quality-improvement data that 225 hospitals provide to the American Heart Association.

But too often, poor follow-up, lack of communication between doctors who care for patients in the hospital and their regular physicians; miscommunication between doctors and patient, and poor coordination and medication management during transitions from hospital to home or nursing home cause patients to “bounce back.” Kennen offers a simple example of poor communication: “I’ve spoken to heart failure patients who had been told to follow a low-salt diet but had no idea that meant they had to avoid high sodium processed foods. They thought it was just about the salt shaker on the table.”

UCSF’s Bob Wachter also has looked at Jencks work, and highlights some of the more interesting findings:

•    Like so many things in health care, there was striking geographic variation in readmission rates – from a low of 13% in Idaho to 23% in Washington, D.C. [See map below]

•    There were also variations by DRG, with the highest readmission rates in patients with heart failure, psychosis, vascular and cardiac surgery, and COPD – pointing the way toward targeted interventions.

•    More than half the patients readmitted within 30 days appeared not to have had an outpatient visit between hospital discharge and readmission, perhaps another target for intervention.

•    Most (70%) surgical patients who are readmitted come back for a medical diagnosis such as pneumonia or UTI.

•    Approximately 30% of readmitted patients come back to a different hospital, so hospitals will underestimate the extent of their readmission problem by looking solely at their own bounce-backs. [Medicare will need to pay attention to its bills. If a patient is admitted to hospital B less than 30 days after being discharged from hospital A, hospital A should pay the penalty.]
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Rates of Rehospitalization within 30 Days after Hospital Discharge (Source: JAMA)

Hospitals Are Acting Now

Hospitals are not waiting for Medicare penalties to kick in. In September of 2008, the Society of Hospital Medicine (SHM) announced that it was starting a pilot project in eight hospitals called Project Boost (Better Outcomes for Older Patients Through Safer Transitions) designed to avoid unplanned or preventable readmissions and emergency department visits within 30 days after discharge. In March of 2009, the project was expanded to 24 other sites, and recently, SHM announced that it is working with Blue Cross and Blue Shield of Michigan and the University of Michigan, to launch a new 15-site version of the program.

This pilot, which will begin in the fall, is taking the project one step further. All of the institutions involved are concentrated in one state and united by a single payer. Most importantly, the hospitalists are reaching beyond the hospital walls to include outpatient physicians.

For more on creative solutions that some hospitals are trying—including using nurse practitioners as a “bridge” from hospital to home—see Kenen’s full post.

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of “Money-DrivenMedicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.

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MD as HELLAnonVikram CJessica HNate Recent comment authors
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MD as HELL
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MD as HELL

“Here is your warrantee, Mr. Smith. It says you have received the maximum benefit for the money and time allowed for this hospitalization. We suggest you stop smoking, lose weight, take your medicines as prescribed, and see your PCP. Failure to comply will allow us to bill you directly and collect from you personally for the next 30 days for any further care for this diagnosis. You are free to return but it will not be free. If you are bleeding, hold pressure, all bleeding stops. If you can’t breathe, breathing is overrated. If you need to come back, then… Read more »

Anon
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Anon

Maggie,
thanks for the AAFP guidelines.

Nate
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Nate

“But you’re ignoring that fact that in many cases, the patient does not pick the insurer, his or her employer does. And the employer is primarily concerned about the cost of the insurance–not whether a case manager is making a good judgment” This is a lie, employers are greatly concerned in most cases about employee satisfaction with insurance. The cost of insurance is an employee benefit in lieu of wages. They only offer insurance because employees want it. If employees where unhappy with the insurance the employer has lost all their ROI for offering it. I know this from working… Read more »

Vikram C
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Vikram C

Maggie, I assume this is extension of your earlier articles about reforms. Your focus on positive aspects and the optimism is very refreshing. However at same time it will be useful to consider the worst case scenario, whereby a lot of supposed benefits are not materialized in time or the systems adapts to maintain the status quo. So I am thinking about the scenario of everyone being entitled to everything with near universal coverage and defined plans. Ideally with better outcomes we could afford that too. But what if that doesn’t happen in timely fashion? How will this new scenario… Read more »

Barry Carol
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Barry Carol

Since it is unlikely that readmissions rates will never get to zero, we need some benchmarks that define what good results are on a case mix adjusted basis. We also need transparency so patients and referring doctors can take the information into account. Rather than deny needed care, we should try to ensure that financial penalties and rewards are appropriate. I can think of at least four different causes for a hospital readmission, all of which might require different strategies to address. They are: 1. The patient did not follow instructions with respect to diet, exercise, medications, etc. even when… Read more »

Jessica H
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Jessica H

I am one of those relatively young nurses who are not YET exhausted, and am eager to move forward. I appreciate you pointing out that hospitals need to give nurses enough time to carry out these added responsibilities necessary to reduce readmissions. My concern is that these new initiatives will be costly for hospitals to implement. I foresee that those carrots you speak of may not make it to the nurses who are already overworked and underpaid, at least not initially. From my experience the carrot needs to be dangled prior to any forward motion. As Medicare uses financial carrots… Read more »

maggiemahar
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Anonymous– Here is the American Academdy of Family Physicians’ guidelines (below) for how the hospitalist (the inpatient care physician) and the family physicain should collaborate. As you can see, it’s up to the ED to notify the family physician that the patient is in the hospital, but after that the family phyisican is supposed to get records to the hostpial (FAX if he doesn’t have IT), pick up the phone and “maintain communication with the patient and family.” Meanwhile, the hospitalist “should be readily available to discuss the patient’s medical problems and hospital course with the family and should provide… Read more »

maggiemahar
Guest

Barry– You suggest that if insurers don’t please their customers, they will lost customers, and this in turn, will displease shareholders. But you’re ignoring that fact that in many cases, the patient does not pick the insurer, his or her employer does. And the employer is primarily concerned about the cost of the insurance–not whether a case manager is making a good judgement . .. In many other cases, the patient has a choice of insurers, but picks a policy based on what he can afford–not based on the quality of care he is likely to receive from an insurer.… Read more »

Barry Carol
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Barry Carol

Maggie, I think healthcare is one of those fields where anecdotes can be used to make just about any point one wants to make. In the case of the UCLA patient, if she contracted an infection there, maybe that was a potentially preventable event. If so, transparency related to hospital acquired infection rates of all types would be useful information to both patients and referring doctors. It could also drive hospital managements and the doctors who work there to do the root cause analysis that could drive infection rates down. Paul Levy’s leadership at BIDMC in this area shows that… Read more »

Nate
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Nate

Not sure how much this matters outside Medicare. Looking at our population we don’t have many readmissions at all. Those that are I usually prefer the person had been discharged and readmitted then keep them in the hospital for 2 months while they are dieing. Cutting the number of hospital infections and follow up to repair botched surgery or retrieve tools we would obviously like to eliminate but I don’t think readmissions is the right tool to measure this or address it. Blanket tracking and grading by number of readmissions makes as much sense to me as lowering the reimbursement… Read more »

Anon
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Anon

Maybe the hospitalist and the hospital nurse after: a. Not informing the PMD the patient was admitted b. Not keeping the PMD up to date on the daily hospital treatment of the patient despite access to all the fancy, expensive HIT that a poor primary doc can’t afford or learn to use c. Not informing the PMD about the patients’ discharge should just take over primary care of any patient admitted to the hospital. Or do you suggest they just send them back to the PMD after the 30 or 90 day bounce back period has expired with the same… Read more »

maggiemahar
Guest

Elizabeth– Thanks much for your response. You write: ” Patient education is a very important aspect of our jobs as nurses, making sure our patients are well educated on their diagnosis and how to prevent any reoccuring problems can also help cut down on readmissions.” I totally agree. I would add only that hospitals need to give nurses enough time to do this. This is an area where hospital administrators need to re-set priorities–and in some cases–hire more nurses. Under reform ,with a major increase in fudning for nursing and nursing education we will have more nurses–but we have to… Read more »

maggiemahar
Guest

Barry– I agree that insurers could provide value-added here, and I hope that they will. But the danger is that they will simply reward hospitals for not re-admitting, without evaluating whether the readmissions was needed. (Again, by law, a for-profit corporation’s first responsiblity is to its shareholders, not to its customers.) Recently I sat next to a well-known doctor at a health care dinner who descirbed how his (well-insured) sister-in-law, who was very ill, couldn’t get re-admitted to UCLA after she had been treated there–and became sicker. Because of his position, he was able to go through several layer of… Read more »

maggiemahar
Guest

Bev M.D. Bev — that anoymous PCP’s comment is, as you suggest, discouraging. Unfortunately, PCP’s have not done a really good job of following up on patients discharged from hospitals. To be fair, this may be because they don’t even know the patient was discharged– the hospital never communicated with them! This makes it clear that the ball is in the hospital’s court– to communicate with the PCP about discharge. Then the PCP needs to get back to the hospital about the date it has set for the patient’s follow-up appt., and whether the patient shows up for that appt.… Read more »

maggiemahar
Guest

Exhausted M.D. Exhausted– I’m happy to say that, for once, I agree with much of what you say– namely that all of these factors lead to readmissions: “Premature diagnosis, narrow minded therapeutic interventions, uneducated patients, impatient family, overworked staff, cost focused decision making, complicated medical situations, less than adequate follow up access or home nursing underestimations, or, heaven forbid, sick people who are not going to get better and have learned the behavioral mod to just go back to the hospital for that quick fix, immediate attention, and genuine but mislead notion that the health care system can cure it… Read more »