Health law’s rules help hospitals cut patient readmission rate

Over the past several months, America’s hospitals have achieved a feat that long seemed beyond reach: substantially reducing the share of patients who must return for treatment almost as soon as they are discharged.

According to statistics compiled by the Obama administration, the nationwide rate of hospital readmissions of Medicare patients within 30 days of discharge declined to about 17.8 percent by last November after remaining stuck near 19 percent over the five years that the data has been collected, and likely for decades prior to that.

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Jonathan Blum, a top official at the Centers for Medicare and Medicaid Services, is scheduled to release the figures Thursday at a Senate Finance Committee hearing. In an interview, he argued that the drop — which has already kept tens of thousands of people out of the hospital — is largely the result of provisions in President Obama’s health-care law.

These provisions include new financial penalties that Medicare, the federal health program for the elderly and disabled, has begun imposing on hospitals with high readmission rates. They also include extra funding and incentives for hospitals and outpatient providers to do a better job of coordinating care for patients after they head home.

“What I think is exciting is that a couple years ago the general reaction to these policies was that it was impossible to reduce hospital readmissions,” Blum said. “And what this data shows me is that it is possible. . . . I believe that what we are seeing is a fundamental, structural change.”

The news comes as the growth of health-care spending is slowing at a record pace.

For a variety of reasons, national spending on health care in 2011 grew by less than 4 percent for the third consecutive year. And in 2012, Medicare’s spending per beneficiary rose by only 0.4 percent, compared to an average of 1.9 percent in the preceding three years.

Yet many analysts say that Medicare continues to threaten the country’s long-term fiscal health, primarily because of the aging of the baby boomers. Administration officials hope that reducing unnecessary hospital readmissions will be a powerful, and politically palatable, tool for further curbing Medicare spending.

The data does not pinpoint the reasons for the reduction in the Medicare readmissions rate. But officials stressed that the decline occurred as hospitals began focusing more on readmissions, in part because of a combination of carrots and sticks in the health-care law.

The law, for example, includes a stream of funding for organizations promoting better coordination of patient care, such as 26 “hospital engagement networks” across the country that are working with 3,700 hospitals to identify ways to reduce unnecessary readmissions.

One of the largest such groups, Premier Healthcare Alliance, which has a $24 million two-year contract to serve 450 hospitals, has used the money to hire an army of advisers to come up with specific strategies tailored to each location. So far, the effort has reduced the average readmissions rate from 11.2 percent in 2010 to 10.2 percent by this past September.

Perhaps more significantly, Medicare in October began penalizing 2,217 hospitals under the law for having too many readmissions. More than 300 hospitals were hit with the maximum fine: a 1 percent reduction in their Medicare payments for every patient over the coming year.

Medicare also now links a portion of a hospital’s payments to its performance on quality measures, including some that could affect the readmission rate, such as whether a patient received an antibiotic before surgery.

These payment changes proved a powerful motivator for officials at Ridgeview Medical Center, a 109-bed hospital system in Waconia, Minn.

The hospital created a team dedicated to pushing down its readmission rates almost as soon as the health-care law was adopted in 2010.

“We knew we were at risk [for penalties] and we were trying to stay ahead of the curve,” said Michael Phelps, the hospital’s chief administrative officer.

Among other initiatives, the team created a template that physicians must use to detail patients’ conditions just before discharging them.

This ensures that the outpatient provider who next sees a patient has a clear record on which to base follow-up care.

Ridgeview also now sends paramedics to visit patients at home within 72 hours of their discharges. The paramedics check that the patients are following their medication plans, and look out for health hazards, even ones as minor as carpeting that could cause the patients to trip and fall.

The results have mostly been encouraging. From 2010 to the second quarter of 2012, Ridge­view improved markedly on a measure that considers only readmissions that were “preventable.” Nonetheless, the hospital’s overall rate of readmission for all patients actually went up, to 8.4 percent from 7.6 percent.

And in October, Ridgeview was informed that it will be subject to the readmissions penalty, which is calculated based on the rates over three years from July 2008 through June 2011.

The fine amounts to about $1 per Medicare patient.

Still, hospital officials say they think the fines could have been far more severe had the hospital not launched its program to reduce readmissions.

And they expect to improve their figures.

“I don’t think there’s one golden nugget to really reduce your readmissions rate,” said Sarah Urtel, the executive leading the effort at Ridgeview. “It’s the culmination of a lot of different strategies.”

 
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