Hospital Readmissions

Hospital readmissions are admittedly costly, but how many are avoidable and how to best avoid them is unclear.   A new report looks at issues in regard to hospital readmissions in New York State, including possible interventions to reduce their incidence.   (NY Readm. Report) In 2008, 15% of all initial admissions in New York resulted in a readmission within 30 days, at a cost of $3.7 billion.  Readmissions for complications or infections cost $1.3 billion and you would like to think all of those should be avoidable.  As might be expected, older persons on Medicare accounted for the bulk of the readmissions.   Readmission rates vary substantially among hospitals in New York State, even after case mix adjustment.

The report identifies four factors believed critical in efforts to reduce readmissions:   better coordination between hospital and primary care physicians; better communication between hospital-based physicians and patients; better support for patients to do self-care on discharge; and better management of medications.  Two interventions that appear to have success in reducing readmissions are the Care Transitions Intervention and Project Re-engineered Discharge.  The report also examined creating incentives to encourage adoption of these interventions, looking at both pay-for-performance and bundled payments.  According to the authors’ modeling, use of these incentives might reduce readmissions by up to 16%.  The authors, however, believe that directly paying for hospitals’ readmission reduction interventions would generate more savings for payers.

A fundamental problem with reducing readmissions is that in the typical fee-for-service system, decreasing readmissions leads to less revenue and hospitals typically bear the cost of the intervention to reduce the readmissions.  To try to better align financial consequences, CMS and other payers have created programs which either penalize readmissions or provide bundled payments which allow hospitals to get the benefits of readmission decreases.  Those programs tend to work in a broad way, not targeted to truly avoidable readmissions.  A better approach would probably be to have a review of suspect readmissions and a policy of not paying for anything which is clinically determined to be avoidable.