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CA Report Says Half of Medicare and Medicaid Bills Pay for Care to Readmitted Patients

Cheryl Clark, for HealthLeaders Media, May 18, 2010

The cost of caring for patients who need readmission to California's acute care hospitals represents half of the Medicare and Medicaid bills incurred in the state, or $31 billion and $10 billion respectively for one year.

That's according to a new report that looks at repeat patient admissions by age, region of the state, payer, and race. The report is one of the few in the country to track readmissions for 365 days after initial hospital discharge.

Readmissions also accounted for $11 billion or 36% of charges to private insurers and $1 billion of the costs paid by patients for their own care.

"Readmissions are an important issue because the are expensive, can involve additional difficulties for patients and caregivers, and often can be preventable," said David Carlisle, director of the Office of Statewide Health Planning and Development, which prepared the 2005 data report. "Our hope is that data can spur discussion on lowering rates of readmissions to affect change in direct patient care, discharge planning and case management."

Also somewhat surprising is the percentage of readmissions by illness category.

Patients diagnosed with psychosis at first admission represent 6.1% of all readmissions in that year, compared with patients with heart failure, who represent 4.2% of all readmissions and patients with pneumonia, who represent 3.8%. This indicates that psychiatric, heart failure, and pneumonia patients were readmitted more often–some more than nine additional times within the first 365 days of their initial discharge–than patients with other illnesses.

Readmissions are an increasing focus for providers as government and other payers launch efforts to penalize hospitals with greater than average readmissions that might be avoided with better inpatient care or discharge planning.

However, the state's report does not distinguish which readmissions were potentially preventable, nor which were for elective procedures stemming from a condition unrelated to the original admission.

"It's a starting point," says Mary Tran, OSHPD research scientist and author of the report. "Hospitals, insurance companies, and any kind of provider can use these to look at their own rates to see where they can improve."

The document looked at 1.67 million hospitalizations in 2005 at 459 California hospitals-about 10% of the hospitalizations in the country–and found that 36%, or 601,656 patients, had at least one readmission within the next 365 days.

While 63% of patients in 2005 were not readmitted at all for the next 365 days, 19% were readmitted just once, 8% twice, 4% three times, 2% four times, 1% five times, 1% six times, 1% seven times, 1% eight times, and 4,305 patients were readmitted nine times or more.

Also, of those 601,656, 13% or 10 came back within the week, and one-third returned within a month. However, the report did not share the findings for severity of disease or condition.

Whether these patients had been hospitalized in 2004 was not evaluated.

The report also finds tremendous regional variation within the state. For example, for hospitals within Los Angeles County, the readmission rate was 1.73 readmissions per person per year, followed by Riverside, San Bernardino, and San Diego counties, 1.61 per year. The San Francisco Bay area, San Joaquin Valley, Sacramento Valley, and mountain area counties had lower rates, 1.59, 1.55, 1.53, and 1.49 respectively.

The report says other papers examining the issue of readmissions see them as related "mainly to problems with discharge planning and care coordination after discharge.

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