Value-based healthcare is paying for quality, rather than quantity, of services. A large component of the move towards value-based care is a set of financial incentives and disincentives designed to drive quality improvement and control costs for hospital-based care.

Preventing avoidable hospital readmissions is a cost-controlling strategic priority these days. It is estimated that roughly 2 million patients are readmitted each year, costing Medicare $26 billion. The Centers for Medicare & Medicaid Services (CMS) estimate that $17 billion of that comes from avoidable readmissions. 

To address this issue, the CMS—through Congressional direction and Administration initiatives—implemented the Hospital Readmission Reduction Program (HRRP) in 2012. The CMS program sets up financial penalties for hospitals with higher rates of Medicare readmissions.

How CMS determines each hospital’s penalty:

  1. CMS evaluates readmission rates of patients who initially went into the hospital for heart failure, heart attack, and pneumonia but returned within 30 days of discharge. 
  2. Two conditions were added in FY 2015: elective hip and knee replacements and chronic obstructive pulmonary disease. 
  3. In FY 2017, CMS added Coronary Artery Bypass Graft surgery to the HRRP measures and expanded the types of pneumonia cases that are assessed.

Currently, hospitals can lose up to 3% of their Medicare payments under the program’s key measure of hospital care quality based on the facility’s readmission rates or the percentage of patients who experience unplanned readmission after a previous stay.

A large health system with over 13,000 employees, 2,000 physicians, and 1,200 licensed beds in the northeast focused on reducing unplanned readmissions to ensure patients received the right care in the right location. This forward-thinking team used a multidisciplinary process improvement approach and three best practices to reduce all-cause 30-day readmissions by 24% in just nine months:

  1. Identify patients arriving in the emergency department.
  2. Analyze the number of patients who are at high risk for readmission within 30 days were identified.  
  3. Case managers must monitor real-time notifications upon patient arrival to focus on coordinating care transitions for the emergency department patient population.

These practices resulted in the elimination of nearly $800,000 in annual CMS penalties as well as improved patient, clinician, and provider satisfaction.

Readmissions are expensive. On average, each readmission costs more than $19,000 to the hospital, according to the Commonwealth Fund. Many health systems are reviewing their care management process and implementing enterprise-wide methodologies that reduce readmissions and cost as well as drive improved clinical outcomes.

Four proven care management methodologies have been shown to impact readmissions and improve care outcomes:

1. Identify High Risk Patients

Certain patient populations are at higher risk for hospital readmission. Socioeconomic factors such as race, income, and payer status, are correlated with rehospitalization rates. Patients with conditions of heart failure, chronic obstructive pulmonary disease, and renal failure, also have higher rates of readmission. 

2. Improve Transitional Care

Quality transitional care significantly decreases hospital readmissions. This care may include rehabilitation, home care, restorative, or skilled care, physical therapy, nutritional counseling, dietary planning, fall prevention, and more. Acute care and non-acute teams must view the high-risk patients as one team and focus on ensuring the right care in the right location. 

3. Ensure Patients Understand Post-Discharge Instructions

When patients misunderstand or forget parts of their post-care directions, it greatly increases their risk of being readmitted to the hospital. Many organizations use the “teach-back” method, where patients are asked to explain their own care instructions back to medical providers. This allows doctors and nurses to assess whether patients fully understand the steps they need to take post-discharge. The Journal of Patient Safety showed that the teach-back method resulted in a whopping 45% reduction in 30-day readmissions.

4. Schedule 7-Day Follow-Up Appointments

Finally, lower readmission rates by scheduling patients for a 7-day follow-up appointment with their primary care provider. Patients who followed this 7-day guideline had a 30-day readmission rate of 12.7%, while patients who waited longer or did not follow up with their physician had a readmission rate of 17.5%, according to the Journal of the American Medical Association (JAMA).

A successful value-based care and readmission reduction strategy requires more than leveraging technology. Healthlink Advisors has a proven track record of accelerating our client’s performance with accountability through prioritizing and implementing enterprise-wide care management processes and technology to scale community and patient engagement.