A provision contained in the Affordable Care Act is about to start hitting hospitals across the nation. With the stated goal of reducing unnecessary readmissions, which costs the Medicare program an estimated $17.5 billion annually, Medicare will begin reducing compensation to any hospitals that have a greater than average readmission rate of patients within 30 days of discharge. This year, Medicare reimbursements to targeted hospitals will be reduced by 1%, increasing to 3% by 2014.
The provision's goal is to encourage hospitals to better coordinate post-discharge care, as part of Obamacare's overall goal of slowing the growth of the cost of healthcare. Over 2,000 hospitals are being penalized for readmissions this year at a combined cost to those hospitals of about $280 million. Only 278 hospitals out of the 2,211 hospitals will suffer the maximum 1 percent penalty.
Further analysis follows.
There is some small amount of controversy that this provision is being unfairly applied, for a number of reasons. Many of the hospitals on this list have high readmission rates for reasons that are not entirely in their control, and all readmissions are counted, regardless of the medical issue.
Patients, especially elderly patients, often get readmitted following discharge for entirely unrelated reasons. An elderly person may be discharged after being treated for pneumona, go home, fall down and break a hip. That person then counts in the statistics. It is not entirely clear that congress intended in the bill to count these scenarios.
Another problem is planned readmissions are also counted. This happens for a number of reasons. A person undergoing chemotherapy and who also has other medical conditions that need to be managed are often treated as in-patients, then discharged between rounds of chemo and radiation therapy. Also, if a condition is discovered that requires surgery, but is not emergent, a patient may have the surgery scheduled for a later date, and be discharged. When the patient checks back in for the surgery, that patient is counted against the hospital.
The list of hospitals being targeted this year also turns up a few surprises, notably that a number of high grade hospitals made the list. These are hospitals that, while otherwise noted for excellence, also seem to have an above average readmission rate. The reasons for that may vary, but often it is because the sickest, hardest to treat patients (that can afford it) end up at these hospitals. Because the hospital prioritizes these patients, they are often admitted more quickly and more often, getting them the treatment they need before it becomes a larger issue.
Specialty hospitals also seem to land on the list with some frequency. Hospitals with large, aggressive cardiac programs, for example, see an awful lot of readmissions. In that case, however, it may be entirely fair: post-discharge care of cardiac patients can and should improve. There is little reason a heart attack patient cannot have great post-discharge outcomes. Heart failure is more complicated to manage, but with home health visits and out-patient followup can also improve.
Another category of hospitals on this list are "safety net hospitals" that serve primarily economically disadvantaged populations. These are the hospitals of last resort, where you go when you are uninsured (or on medicaid) and will not be too picky about whether you can pay or not. The type of persons this hospital serves are also referred to as "underserved," meaning that follow up care is hard, or impossible, to come by in their community. Typically, inner-city, poor, and not enough clinics or primary care doctors (even if there are enough doctors, there is a limit to how many medicaid patients a doctor will take because of how little medicaid reimburses).
The problem in poor areas and with safety net hospitals that leads to readmission is primarily that the people are poor. They do not have reliable transportation. They cannot find a doctor to accept them, and when they do, they often have to wait a long time for an appointment. So, an ambulance ride to the emergency room is usually the only medical care they get. This is also a population with an above average rate of preventable medical problems, often related to obesity, smoking, and alcohol and drug abuse, all of which lead to chronic health problems requiring frequent hospitalization.
Penalizing safety net hospitals is problematic, as these hospitals are already woefully underfunded. The small amount of reduced reimbursement from medicare will hit these hospitals especially hard, since their margins are so tight to begin with. They do not have the resources to apply to aggressive post-discharge care, and with little in the way of government assistance, will not be able pay what it takes to improve. Fortunately, many will be able to take advantage of charity and public services that already exist, and Obamacare does make grants available for hospitals to improve their followup care.
As far as charity and public services are concerned, though, rural communities are disadvantaged by far compared to their inner-city counterparts. Rural hospitals also have rather slim margins, simply because of their low patient volume. Transportation is also an issue for post-discharge care in rural areas, with patients having to travel rather long distances to appointments, and if they need to visit with a specialist, may even have to travel to another county entirely. So home health visits are especially important in rural communities, the very same communities that have the least resources to provide home health care.
Even with all of the problems, though, the fact is the provision is already working as intended. The targeted hospitals are taking the threat to their revenues seriously, and even hospitals who did not make the list are working to improve post-discharge outcomes.
By far the most common solution hospitals are employing is home health visits. These are repeated followups by trained aides or by registered nurses, going directly to the patient, assessing their overall health and condition of their illness. Followup care can be given right there. If medications need to be adjusted, that can be done over the phone with the doctor. If labs need to be done, the nurse can do a blood draw in situ. Whether home health visit programs like this are administered by the hospital or by an outside organization, they are an extremely important part of any post-discharge plan.
Some hospitals are also starting to provide their own transportation services. Especially important in rural areas and cities, and for the elderly, being able to get to and from appointments with little hassle or cost to the patient can dramatically affect whether the patient will adhere to their discharge plan. Medical transport has been available for a long time, of course, but it is a highly regulated industry and can be very difficult to obtain. By the hospitals establishing their own transportation service, neither the patient nor their discharge planner need navigate the arcane bureaucracy of Medicare to get approval, and can transport the patient anywhere they need to go for followup care. The Veteran's Administration hospitals have been doing this for a long time, and private hospitals are starting to catch on.
According to many doctors and hospital administrators, though, the most important and most effective tool they have to reduce readmissions is the patient's family. A supportive, attentive family can do wonders for post-discharge outcome, and in this vein, many hospitals are working to improve patient education. By counselling the patient and their families intensely before discharge, they are hoping to equip the patient's family with the tools and knowledge necessary to manage the patient's condition. A proactive family member is in many ways better than any home visit nurse. Because they know the person intimately they often recognize a potential problem a lot sooner than even a trained professional would. A quick telephone call to the doctor for advice or a new prescription avoids many a hospital admission, and hospitals know this.
Much more can be done to improve post-discharge outcomes and reduce readmissions. It is clear, though, that without the Affordable Care Act, hospitals had little incentive to take any of these actions. Whether the Medicare reimbursement penalty is the way to do it, and whether its being implemented fairly and properly, the evidence is already there. Even long before this month, when the penalty started to kick in, with just the threat of reduced Medicare revenues, hospitals were taking action.
There are valid concerns that the way the penalty is applied, failing to take into context the specific reasons for readmission rates, based on the communities each individual hospital serves. It is also concerning that some of the hospitals being penalized are the least likely to be able to bear the financial hit nor be able to invest in new strategies for improvement. Government grants, public services and charity services can help, if they are available, and despite these concerns, the goal is laudable and important: Improved outcomes, reduced costs, and a financially sound Medicare.
Medicare To Penalize 2,217 Hospitals For Excess Readmissions [Kaiser Health News]
Medicare Penalties For Readmissions Could Be A Tough Hit On Hospitals Serving The Poor [Kaiser Health News]