As a Scot (my name is spelled with one, “t” because my father wanted to be sure I never forgot), I remember with both amusement and annoyance a line from the movie, Braveheart: “The trouble with Scotland is that it’s full of Scot’s.” As I see it, the trouble with trying to address healthcare costs through reducing avoidable readmissions is that there are too many readmissions. Bear with me . . .

Avoidable hospital readmissions are the lowest of low hanging political fruit in the Healthcare Reform debate, representing an immediacy of opportunity to impact aggregate healthcare spending for very little political capital in exchange. The means of cost reduction is directly controlled by the Federal government – in the form of Medicare payment reductions. And the organizations identified as the culprit deserving of such reductions are those behemoth institutions of waste and inefficiency: the hospitals (yes, that’s sarcasm).

To be sure, there is substantial evidence where individuals discharged from a hospital stay wind up back in the hospital because of factors and events that could have been avoided. But avoided by whom – how – and at what cost? Healthcare providers of all types that will be impacted by the readmission penalty had better begin to understand the economic ramifications of how these questions are going to be answered.

As has been rather widely publicized – yet from my personal observation, up until just recently still largely ignored – the Affordable Care Act (ACA) included Section 3025: Hospital Readmissions Reduction Program. Section 3025 amended the Social Security Act such that it now requires CMS to reduce payments to IPPS hospitals with excess readmissions, effective for discharges beginning on October 1, 2012 (i.e., in a few weeks). Initially, the Program has established readmission measures for Acute Myocardial Infarction (AMI), Heart Failure (HF), and Pneumonia (PN).

Excess readmission ratios are calculated by comparing national average rates of readmission for patients discharged to a hospital’s individual experience while relying on a methodology endorsed by the National Quality Forum (NQF). I recognize this is a gross oversimplification, but all of the detail you could hope to find is now widely available – whether on the CMS site referenced above or many other organizations that have made such information available on their web sites.

For FY 2013, determination of the excess readmission ratio is based on actual discharges having occurred during the 3-year period of July 1, 2008 to June 30, 2011. According to a Kaiser Health News report, more than 2,000 hospitals will begin to see payment penalties under the program due to patients being readmitted within the 30-day threshold.  The overall anticipated impact of these penalties is approximated to be $280 million over the next year.

Not surprisingly, as with many aspects of the ACA, the Readmissions Program carries with it a great deal of controversy.  Many clinicians, including physicians, who are directly responsible for the care of those individuals represented by the statistics entering into the determination of a readmission penalty feel that readmissions are ultimately driven by acute medical needs – and patients that need to be in a hospital, well, they need to be in a hospital. Simple as that. Better to pay a relatively small penalty than have a patient die trying to avoid it goes the thinking.

Yet those involved in healthcare delivery on all sides (the clinical, the social, the community and the administrative) understand first-hand the reasonable and plausible goal that the Readmissions Program is seeking to address: a reduction in readmissions that are caused by insufficient and/or improper assistance and care available to the individual after being discharged from a hospital; i.e., the avoidable readmission.

Readmissions resulting from the natural progression of a disease state, comorbidities, unexpected and/or negative reactions to post-discharge treatment – there is legitimate concern that the Readmissions Program will interfere with clinicians’ ability to effectively manage their patients’ health in lieu of what are being considered unwarranted and unwelcomed outside influences and distractions. On the other hand, readmissions that result from a decline in condition owing to non-clinical factors, such as personal trauma associated with transferring and transitioning, the failure to follow a prescribed post-discharge treatment regimen (e.g., diet, exercise, medication), the inability to keep medical appointments – these are significant contributors to readmissions that PA/LTC organizations can have a significant impact upon.

But being able to determine cause in individual cases is going to be a monumental challenge that neither the ACA, nor the regulations promulgated for the Readmissions Program, adequately address. It is going to result in a lot of finger pointing on ward floors – and underneath the tables in board rooms. So we are left with two choices: do some more complaining and hope that the ACA is repealed (and replaced by an ultimately very similar Republican approach two or three years from now), or roll up our sleeves and be innovative in spite of the regulatory challenges.

For those PA/LTC organizations wishing to pursue the latter, I suggest they begin to invest immediately in the development of an operational infrastructure that will facilitate their ability to record, monitor and report the requisite data elements that can be used to evidence all of the contributing factors leading to hospital readmissions of the individuals under their care – clearly and unequivocally. Though, in theory, a large part of the impetus for the Readmissions Program is to engage hospitals in having accountability and responsibility for patients’ welfare post-discharge, as a PA/LTC provider I would interpret that reality as being given responsibility without authority.

Remember this: knowledge is power.  Before engaging in any type of contractual agreement with a hospital that ascribes financial responsibility for hospital readmissions, the PA/LTC organization must be in a position of negotiating strength.  That strength will come from the ability to know and understand – before the hospital does – the nature and root cause of a readmission.  Power will also come from the ability to support that understanding with evidentiary support.

The other integrated concept here, of course, is risk management.  The same knowledgebase that can be used to build negotiating strength can be used to mitigate the risks  – market, operational and financial – associated with hospital readmissions.

PA/LTC provider organizations stand to benefit in several ways from the Hospital Readmissions program.  The inherent demand generated by hospitals seeking to have greater control of post-discharge outcomes should be welcomed in light of trends away from institutionalized care.  The stronger voice many PA/LTC clinical staff have sought in dealing with hospital staff is getting a well-deserved boost.  And done wisely, there are new revenue opportunities available at a time when reimbursement is being ratcheted down at every turn.

As discussed above, however, there are also substantial performance risks that will ultimately bring down some organizations before all is said and done.  Don’t be one of those organizations.

  ~ Sparky