There's ample disagreement about how much control hospitals can exercise over readmission rates. Farsighted leaders are taking on a big endeavor by focusing on all-cause readmissions.
This article appears in the October issue of HealthLeaders magazine.
Hospital leaders have long known that they would be at risk for penalties from the Centers for Medicare & Medicaid Services based on how well they prevent 30-day readmissions for three targeted diagnoses. But that amount of lead time may not have been enough: More than 2,000 hospitals faced penalties in the 2013 fiscal year based on discharges between July 1, 2008, and June 30, 2011.
Still, no matter how badly they missed, hospital penalties for FY 2013 were capped at 1% of Medicare reimbursements. But that cap ratcheted up to 2% for FY 2014 and 3% for FY 2015. Besides that, the number of conditions and diagnoses at risk also are likely to increase dramatically.
There's ample disagreement about how much control hospitals can exercise over readmission rates, or whether readmissions rates are indicators of quality patient care. Regardless, that is a political debate that has already been fought on the Medicare side, and commercial payers are likely to follow suit. The rule is the rule, and it's left to hospital leaders to figure out how best to reduce readmissions such that quality patient care and the metric are both best served, if that's possible.
Looking at all causes
In terms of strategy, what's the best way to approach this large and growing risk of reduced revenues? Not necessarily by targeting the conditions CMS has highlighted for penalties, say those who have had success in reducing readmissions. The debate centers over whether hospitals and health systems should target the three diagnoses—heart attack, heart failure, and pneumonia—that are guaranteed to provide an immediate return on investment by avoiding penalties or instead focus on so-called all-cause readmissions, says Laura Jacquin, managing director at Huron Consulting Group, a Chicago-based consulting firm.
"What we feel is best practice is to consider all-cause because it reflects better preparation for the future and knowing that, in true CMS fashion, we can expect more diagnoses to be added," she says.
Still, it's a big endeavor to attack readmissions for all causes. Therefore, it may be easier to manage by staging your system's interventions by focusing on certain diagnoses as pilots with the goal of expansion, says Jacquin.
Regardless of the approach, one of the most important decisions that can be made is to ensure there's a standard method to how the organization is treating all patient populations. That's where WellStar Health System, a five-hospital, 1,321-licensed-bed system based in Marietta, Ga., chose to begin six years ago.
Reynold Jennings, WellStar's president and CEO, says what makes implementing a readmissions strategy so complicated is that there's no single reason anyone gets readmitted to the hospital, so it's an imperfect metric of quality care to begin with. But the holistic approach works better because all facets of care delivery have an impact on readmissions.
Focusing on just the three diagnoses that may generate penalties is shortsighted and may be counterproductive in the long run. That's why so many CEOs these days boil down their strategy to reduce avoidable readmissions to "doing what's right for the patient," as Jennings says. That's a frustratingly simple answer to a very difficult question, and "doing what's right" can mean spending lots of capital and staff time on things that may not yield a definable return on investment.
Jennings says WellStar, which also owns ambulatory, primary care, imaging, and other therapeutics, was able to get to a viable readmissions strategy that is scalable through its medical home program.
"The 3%–5% of the sickest patients who have three or more chronic illnesses consume at least 30% of all healthcare dollars and maybe as much as 50%," he says.
So it makes sense to focus on that group of chronically ill patients. Studies have shown that many such patients get readmitted due to environmental factors beyond the health system's control, such as compromised financial means, mental health problems, or lack of a strong family support system. Jennings thinks, however, that about half of the system's patients don't have those additional risk factors, and thus are a good place to start.
"There's nothing a hospital can do to take care of thousands of patients who fall into that first category, but the other half of readmissions is due to poor chronic medical management," he says. "Originally, most of the literature focused on the primary care physician's office, but without specialty physicians and their teams aligned with the primary care doc, you can't get to medical home management on an outpatient basis."
What WellStar is doing to intervene with patients for whom it can make a difference on readmissions is an approach that has already paid dividends, Jennings says.
"I personally don't think most hospitals are implementing a proactive strategy," he says.
Based on published readmission rates, he says an 8% readmission rate for all causes is the best case, while 14% is the midpoint. WellStar is at 8%.
"The hospitals in the higher range have a less synchronized and less coordinated medical staff leadership structure," he says. "Therefore, care is delivered in a silo fashion without regard to the patient as a whole. How we got down to 8% is we got into clinical service line management."
WellStar expanded its clinical service line management from seven departments to 11 over the years, and includes both its employed and its independent physicians on clinical service line councils, on which more than 100 physicians, both independent and employed, serve. Those councils meet and figure out how physicians can and should collaborate on the sickest patients.
Further, under an accountable care organization, the health system can redistribute dollars to allow primary care physicians to spend time they need on, for example, predictive modeling, care managers, and call centers for medication management.
"Quality of care to the patient represents the keys to the kingdom," says Jennings. "You'll cut some revenue if you tackle all-cause, but if you go after the easy-to-solve issues on readmissions, you won't always get there. That's why we got into Medicare Shared Savings: We saw the wisdom of attacking all spectrums simultaneously."
Risk stratification
One of the key strategies that healthcare organizations should consider to get to the best practice of all-cause readmissions prevention is to look at ways they can identify patients who might be at higher risk of readmissions, as WellStar has begun to do, says Huron's Jacquin.
"More clinically integrated systems can accomplish this better, and that's an opportunity for some revenue," she says. "But the bottom line is, it's not something you can turn on overnight."
She also says such leaders recognize that doing medical management work with an eye toward reducing readmissions is going to impact revenue negatively, but it's the right thing to do and will pay off in the long run as penalties are increased and diagnoses added.
"At this point, there's not really much you can do to limit the revenue impact," she says. "And besides, CMS won't sit still."
Leaders need to develop different tools and different approaches for high-risk, moderate-risk, and low-risk patients, but most important, they must identify such patients.
"Building these things anticipating all-cause means it won't be quite as difficult later," she says.
Montefiore Medical Center in New York City's Bronx borough has a long history of taking risk with its patients. Anne Meara, RN, MBA, is associate vice president of network care management for CMO, Montefiore Care Management, a healthcare management company that works with a network of more than 3,400 physicians and ancillary providers who provide care to more than 225,000 individuals covered by a variety of government-sponsored and private sector health insurance programs. She says focusing on readmissions only is likely to be less effective than working to eliminate system breakdowns and improving chronic care management.
Hospitals, from a leadership standpoint, are often lured into focusing on the readmission and not the factors that led to it in the first place. So it's not that targeting can't work, but that it's very short-term and not sustainable. In fact, Meara says focusing on readmissions at all leaves out all the interventions that can be made to a patient's care along the way. The readmission represents the culmination of all that effort, or lack of it.
"Focusing on the readmissions is focusing on the far end of the continuum," she says. "Particularly with preventable readmissions, there are systems breakdowns along the way—some related to things in control of the healthcare provider and some not so much. We're focused on many stops along the way and moving preventive care and chronic care management further upstream in the continuum."
Meara says Montefiore's efforts to reduce readmissions critically involves partners outside the health system because patients in the area access many different healthcare providers that aren't necessarily owned or controlled by the health system. In partnerships with local payers and other healthcare providers, including other hospitals, Montefiore has implemented extensive interventions geared toward helping avoid readmissions in all stratifications, even among patients who may have psychosocial issues or transportation problems. They scale up interventions based on risk factors.
"These are not high-tech interventions, but they are resource-intensive," she says. "Many hospitals are engaged in post follow-up phone call programs. The difference with this is, we stayed involved."
Other hospitals may stop intervening after the postdischarge follow-up call, for example, and they often don't go beyond checking on prescription-filling and adherence. The care transition managers involved in the Bronx Collaborative—which includes three hospitals: Montefiore, St. Barnabas Hospital, Bronx-Lebanon, and two payers: EmblemHealth and Health First—not only search to identify challenges surrounding patients likely to be readmitted, but also are coached to intervene.
Results bear out the return on this increased level of intervention. Among 500 patients who received two or more "interventions" in the Bronx Collaborative to manage the transition between hospital and home, only 17.6% were readmitted to the hospital within 60 days of discharge versus 26.3% among a comparison group of 190 patients who received the current standard of care. When the other 85 patients who received only one intervention for a variety of reasons are included in the results, there was a higher readmission rate, at 22.8%, but still lower than the standard.
"That's where it's difficult for hospitals—where the savings are not accruing to them. That's the dilemma. The question was how do we move to the place where the way we are reimbursed works with this?"
Montefiore leadership makes a compelling case to local payers that using the same case manager who intervenes during hospitalization and follows up for 60 days postdischarge builds trust as well as, critically, compliance with postdischarge physician appointments and drug regimens. The case managers integrate such follow-up into what Meara calls "usual care" to enhance transitional planning processes.
"We have very strong working relationships with the two health plans involved," says Janet Kasoff, EdD, RN, the senior director of the Center for Learning and Innovation for CMO, Montefiore Care Management. "I'm really happy that those people did see this as an opportunity. In order to reduce readmissions, we need to work together."
As part of the discussions about readmission prevention with payers, the Bronx Collaborative was formed to improve healthcare in the Bronx, with the Care Transition program to combat high readmission rates at all three hospitals.
"Working together, we did craft a care transition fee such that we were paid for this work," Meara says. "That's a differentiator. Hospitals need to be looking to go down this path of contracting in different ways with payers, but who has? It's a huge challenge to make this kind of investment if there's not some share in the savings to be had."
That said, now is the time for hospitals to face up to going down that path with payers. Given the readmission penalties that are there now and those that are likely in the near future, sticking to business as usual is clearly not the right way to go.
"You need to be asking yourself, if I'm not part of an ACO, how can I partner? One of our partner hospitals is not going to be an ACO, but it will be a good partner in our ACO and I think that's the pathway," says Meara.
"The ability to demonstrate that hospitals and payer organizations can work collaboratively toward a goal and establish standards and processes across organizations that sort of collaboration has much broader implications," Meara says. "We can't only rely on ourselves to be successful."
Reprint HLR1013-4
This article appears in the October issue of HealthLeaders magazine.
Philip Betbeze is the senior leadership editor at HealthLeaders.