As many as a fifth of all Medicare patients are re-admitted within a month of being discharged and a third are re-hospitalized within 90 days.
Dr. Stephen F. Jencks, a former Medicare official, authored a study which analyzed Medicare claims data on patient re-admissions. He estimated that this cost was $17 billion in 2004 alone. Many re-admissions could be prevented with better follow-up care, according to Jencks’ study in the New England Journal of Medicine and as reported in the New York Times.
The Obama administration has already identified hospital readmissions as a source of potential cost-cutting. The president’s budget calls for $26 billion in savings from patient re-admissions over 10 years, which includes lowering payments to hospitals with high numbers of patients who are re-admitted. Such a kneejerk reaction simply penalizes hospitals for following the rules — get patients out of the hospital according to DRG rules.
More Unintended Consequences
In our opinion, a kind of reaction by government is the wrong way for an enlightened leadership to address hospital readmissions. Simply decreasing payment to hospitals with high rates is an example of not seeing the whole situation. Penalizing hospitals by reducing payment for readmitted patients will create yet more unintended consequences.
Instead, more thought should be given to helping hospital leaders solve the problem with educational and outpatient care that is reimbursed. This approach can lower readmissions without making hospitals bear the financial consequences for failed policy.
We stand solid behind the need for rapid healthcare reform, but not by going so fast that the reform comes out wrong. Penalizing providers will have repercussions that hurt patients and, in the end, increase healthcare costs. Working with providers on a comprehensive and financially supported plan to overcome a serious problem is a necessary part of successful reform.
Filed Under: Featured Articles • Hospital Leadership
Tags: Federal Policy
About the Author
Cary understands what it takes to make, “Better American Hospitals.” In addition to being a seasoned consultant, Cary has worked as interim hospital CMO in three different organizations, as well as served as medical director for two multi-specialty medical groups and several HMOs. Cary has a solid history of leading medical staff through improvements in utilization management, changes in peer review practices, and corrective action procedures. As President and Chief Operating Officer, Cary is armed with a diverse background in hospital, medical group, and managed care settings, and has immersed himself in developing the strong knowledge base and extraordinary skill set needed to successfully improve today’s hospitals.
While serving as a member of the American College of Physician Executives, Cary has used his deep knowledge of the complex structures of the healthcare field and applied it toward implementing quality improvement initiatives and developing governance structures, strong compensation plans, productivity reporting models, and effective physician management training programs. Prior to joining Compass Group, Cary provided a number of successful consultant services resulting in projects that included the effective merging of medical staff of two hospitals, reducing the length of stay at hospitals, decreasing inpatient utilization for managed care organizations in several markets, the successful turnaround of the financial performance of a Medicare PHO with full capitation, mentoring Chief Medical Officers, evaluating medical group capability for managing capitation, and improving operating room utilization. Cary continues to use his compelling interpersonal skills to maintain a strong focus on improving clinical operations, developing medical staff leadership, and strengthening physician relationships.
While Cary served on active duty in the U.S. Navy, he was Head of the Quality Assurance Department of the Navy Medical Command, National Capital Region, in Bethesda, Maryland. Cary is board certified and completed a laboratory medicine residency and an immunohematology fellowship at Washington University in St. Louis. In addition to his numerous national speaking engagements, he has authored a number of publications including, Hospital Service Recovery, Journal of Hospital Marketing and Public Relations.
Case studies to learn more about ways in which Compass Clinical has worked to create better American hospitals.