All Pain, No Gain

June 5th, 2009 | Sources: NY Times

Readmissions to hospitals, defined as a second admission within 30 days of hospital discharge for the same or a similar medical condition, cost Medicare $17 billion per year.

it'slikeyouneverleftMany readmissions can be prevented by coordinating post-discharge care more effectively and implementing simple home monitoring programs.

The problem is that when hospitals implement such programs, it sets them back financially. Payers like Medicare reap all the benefits. 

Take Park Nicollet Health Services, for example. The Minnesota-based hospital and clinic system has long-since established a reputation for its innovations in the quality of care. Four years ago, the provider began spending $750,000 per annum on nurses and special software to reduce readmissions for congestive heart failure.

The program reduced such readmissions from 16% to 4%.

The program saved Medicare $5 million per year, but Park Nicollet received not a cent for its efforts. In fact, fewer admissions for the condition actually cut revenues for the intrepid quality leader.

“We’ve kept it up out of a sense of moral obligation to these patients, but we’re getting killed,” Park Nicollet’s chief executive David Wessner told the New York Times.

“We have a reimbursement system for health care that is not aligned with providing high-quality care,” said Barry Straube, Medicare’s CMO. “Unequivocally, there has to be payment reform.”

Michael Connelly, chief executive of Catholic Healthcare, which has similar programs, says payers need to bundle payments for a hospital stay and the follow-up care.

“One of my frustrations is it’s taking so long to do this,” he told the Times. 

“Hospitals who say they are penalized for doing the right thing are right,” concurred Robert Berenson, a policy analyst at the Urban Institute. “If we can’t do this, we can’t do much of anything in health reform.”


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