Transitional care interventions can prevent readmissions for congestive heart failure patients and save healthcare costs overall by keeping people healthier. But they're money losers for individual hospitals under current Medicare payment structures, according to a randomized trial at Baylor Medical Center Garland.
"We're raising a red flag," said Brett Stauffer, MD, a Baylor internist with the system's Institute for Health Care Research and Improvement who, with colleagues at Yale University Medical School, authored the report.
"While we do believe that if you were to look at the big picture, these sort of interventions do probably save (Medicare and other payers overall) money, from the hospital provider's perspective – and we have to be sensitive to this – the hospital can end up losing a considerable amount of money if they're successful at preventing readmissions."
That's because Medicare does not pay the average $1,100 cost of providing the intervention to each CHF patient.
Stauffer's report was published Monday in the Archives of Internal Medicine.
Stauffer and colleagues set out to test a model intervention at a medium community hospital, such as Baylor's 268-bed facility in Garland, to see if intervention strategies would work outside a larger academic hospital setting. An advanced practice nurse led a team that instituted goal-setting, reviewed health behaviors and skills of the patients, made at least eight home visits, and was available by phone 7 days a week.
The program was a success at reducing 30-day readmissions, by 48% compared with rates before the intervention.
The hospital, however, lost an average of $751 in revenue on each patient.
"While we are not-for-profit entities, at the end of the day we still have to make payroll," Stauffer said in a telephone interview. "We have bills to pay and have to maintain enough margin to pay for capital expenses, build new facilities and keep them updated, and that's got to be paid for by somebody."
In an accompanying editorial, Mitchell Katz, MD, head of the Los Angeles County Department of Health Services, called Stauffer's report "illuminating."
"The cost-analysis by Stauffer, et al, points to a widespread problem in American medicine. Reimbursements are generally linked to episodes of care: visits, hospitalizations, treatments and procedures. Reimbursements are rarely provided for preventing negative outcomes.
"As long as this is the case, the American system will produce more visits, hospitalizations, treatment, and procedures," Katz wrote.
Because preventing readmissions is the right thing to do, and because Baylor can afford the program, the intervention will continue, Stauffer said. Garland only admits 300 heart failure patients a year, "so it probably isn't going to bankrupt us, but it speaks to the larger issue. You really want hospitals to focus on this, and expand it beyond heart failure...and when you do I think you do run the risk of undermining the financial stability of a lot of these systems."
He added that if there isn't payment policy reform "in a way that pays for this, and incentivizes hospitals to do this kind of work, you're not going to get everybody doing it, or, you will have places doing it that can't afford it long term and that's not a good way to run a system."
Stauffer said that the study's findings were a surprise, and the first time to his knowledge that anyone has looked at readmission efforts at this level, with a smaller community hospital. He emphasized that from a societal perspective, preventing readmissions means keeping patients healthier in the long run, and that saves many other kinds of costs for physicians, procedures, home care or skilled nursing care.
In the report, Stauffer and colleagues emphasized that estimated reductions in reimbursements for heart failure readmissions by the Centers for Medicare & Medicaid Services that will take effect during the next three years reduces the negative impact, but "by only 10%. A bundled payment system, based on a 30-day post-discharge episode of care in which no additional payments would be made for readmission, makes them financially more attractive than usual care.
"However, the modified reimbursement system would result in a significant reduction in contribution margin if payment rates are set at the current level for HF (heart failure) index admissions under Medicare's prospective payment policy, without additional consideration for the cost of interventions such as TCPs (transitional care programs)."
Prior research illustrates the enormity of the problem. In 2004 alone, Medicare paid $17.4 billion for unplanned rehospitalizations, which one in five hospitalized beneficiaries go through within 30 days of discharge. But for patients with congestive heart failure, the rate soars to 50% who must come back to the hospital within 30 days.
Stauffer said in the interview that Medicare non-payment policies in the event of an adverse event, such as a hospital-acquired infection, during that readmission would not make that much difference in the overall financial equation.
In the same issue of the journal, further evidence that readmissions prevention programs work was provided in another paper by Rachel Voss and colleagues of Quality Partners of Rhode Island and Alpert Medical School of Brown University in Providence.
Their report validated another model of readmission prevention effort, the Care Transitions Intervention or CTI, with 257 patients at six Rhode Island hospitals. That effort reduced readmissions by 36% compared with a control group.
However, that program met with challenges because just over half of those approached agreed to participate, and some resisted a home visit.
See Also:
Low Health Literacy Linked to Mortality in CHF Patients
CHF Patients May Fare Better, Pay More at High-Volume Hospitals
12 Ways to Reduce Hospital Readmissions
$50 Blood Test Could Predict CHF Readmission Risk