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Reducing Readmissions Across all Payers

Deb Bulger, CPHQ, April 26, 2018

Hospitals have spent the last decade tackling readmission rates. Motivated by the call to improve care quality and desire to avoid financial penalties, they developed strategic programs to drive down readmissions.

Hospitals have spent the last decade tackling readmission rates. Motivated by the call to improve care quality and desire to avoid financial penalties, they developed strategic programs to drive down readmissions. Since the inception of CMS’ Hospital Readmissions Reduction Program (HRRP) in 2012, approximately 78% of the nation’s hospitals have been penalized a collective $1.56 billion dollars. As difficult as this has been, hospitals have shown marked improvement. As Medicare readmission rates appear to be plateauing, hospitals now have an opportunity to apply lessons learned to new challenges: Namely, reducing readmissions across commercial payer and Medicaid populations.

Readmission Strategies – Expanding Beyond Medicare

The HRRP was designed to motivate providers to improve outcomes and curb the $17 billion Medicare spend on avoidable readmissions. The program had led to notable healthcare innovations such as predictive analytics to identify at-risk patients and greater emphasis on post-acute care monitoring and technologies that empower patients to participate in their own care. By 2014, CMS declared the program a success, reducing Medicare spending by $9 billion.[i] But, today, progress seems to have slowed. According to a December 2016 JAMA study, there has been no more than 0.1% reduction in readmissions on average between 2013 to mid-2016[ii], causing some healthcare leaders to question whether the rate of improvement is sustainable or if health systems should simply dig deeper to find new opportunities.   

While the policy debate lingers, health systems can be proactive, approaching readmission management not as an encounter related outcome but as a mission critical process to improve care across the continuum. Today, hospitals have an abundance of data that, when combined with predictive modeling and visualization tools, enable a holistic view of that process. 

1. Evaluate Risk in non-Medicare Populations

Monitoring Medicare’s six conditions with a laser focus may leave little time for local initiatives. But keep in mind while Medicare patients account for 56% of all readmissions, “non-Medicare readmissions are frequent and make up a significant percentage and substantial cost,” says Jordan Strom, MD, research fellow at Beth Israel Deaconess Medical Center. [iii] As risk-based payment becomes the norm, it is essential to identify and manage readmissions regardless of payer. For example, not only do readmission rates and reasons vary by age group, but also each generation, especially Millennials and Baby Boomers, varies greatly in how it prefers to interact with the healthcare system. Financial decision support data is readily available and a trusted source of truth for diagnoses, procedures, cost, and intensity of care—data that can be used to build predictive models for real time screening of hospitalized patients. This enables case managers to develop transitional care plans tailored to the preferences of the healthcare consumer and increases the likelihood of a successful program.    

2. Examine Market Characteristics

Factors outside a provider’s control sometimes pose the greatest challenge to preventing readmissions. Limited access to healthcare resources, age, lack of family support, low health literacy and other social determinants of health can impact a patient’s ability to manage their care. You may not be able to control those risk factors but data can facilitate a strategic approach to managing them. Acquire and aggregate non-traditional data such as household income from census data and clinical data from the health information exchange to identify both clinical and social health risks. The addition of geospatial analysis can augment the Community Health Needs Assessment by identifying areas in need of outreach. This in turn supports a partnership with community resources to ensure access to needed capabilities.

3. Analyze Key Financial Indicators

Implementing a readmission prevention program has a financial impact on the healthcare system, including technology and human resource costs required to coordinate care and the potential loss of revenue from fewer hospital admissions. Use pre-adjudicated claims data to identify cost areas and revenue opportunities. Measure readmissions from each post-acute care setting to monitor the effectiveness of prevention programs and ability to lower total cost of care. Also, monitor physician referral patterns and quantify out-of-network leakage that results in lost revenue.   Recapturing procedural volume can help offset reduced admissions for healthier financial outcomes.   

Regardless of financial penalty risks, measuring hospital readmission is important in assessing care outcomes and the effectiveness of processes used to deliver that care. By leveraging data as a strategic asset your organization will be better prepared to manage new payment initiatives and effectively serve your patients.

To learn more about how real-time data can lead to reduce readmissions download our case study with Cookeville Regional Medical Center, click here.


[i] Penalty program slowed Medicare readmissions, but progress has stalled. Mara Lee, June 22, 2017   http://www.modernhealthcare.com/article/20170622/TRANSFORMATION02/170629949  accessed January 31, 2018

[ii] Desai NR, Ross JS, Kwon JY, Herrin J, Dharmarajan K, Bernheim SM, Krumholz HM, Horwitz LI. Association Between Hospital Penalty Status Under the Hospital Readmission Reduction Program and Readmission Rates for Target and Nontarget Conditions. JAMA. 2016;316(24):2647–2656. doi:10.1001/jama.2016.18533  http://jamanetwork.com/journals/jama/fullarticle/2594718  accessed August 21, 2017

[iii] Strom JB, Kramer DB, Wang Y, Shen C, Wasfy JH, Landon BE, et al. (2017) Short-term rehospitalization across the spectrum of age and insurance types in the United States. PLoS ONE 12(7): e0180767. https://doi.org/10.1371/journal.pone.0180767   Press release accessed August 23, 2017:   http://www.bidmc.org/News/PRLandingPage/2017/July/Hospital-Readmissions-Across-All-Ages-and-Insurance-Types.aspx   

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