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Readmission Reduction Strategies Pay Off

Karen Minich-Pourshadi, for HealthLeaders Media, March 16, 2011
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“Plus, for our CFO, this program was simply a matter of deploying resources without having to increase a lot of cost,” he adds. “The ability to treat these patients in-home or in an outpatient setting is far less costly than having them readmitted.”

Prior to enacting its new effort, OLRMC used a more traditional case manager and staff nurse approach. Though there was some healthcare coaching in place, there were no standard order sets and no formal guidelines to address the language or insurance coverage barriers.

In July 2009, OLRMC put the new set of protocols in place, and nurse leaders and a 12-member multidisciplinary team was assembled. As with Baylor, the program was enacted swiftly, within eight weeks. Everyone on the team was notified of a cardiac discharge, and they began tracking core indicators. They used achievement awards to reward and encourage accountability for the clinical team and to keep the program transparent.

“The innovation is easier than a lot of people realize,” says DiLoreto. “When you give people the confidence to try this, they get past the greatest barrier, which is the willingness to try. It doesn’t take a lot of dollars to get people out of their silos … We had good communication with our leadership and a physician champion who helped us design some clinical best practices; now our other facilities are using these.”

The results are telling; OLRMC is performing better than budgeted this year, and attributes much of that to the reduction in readmissions as well as other cost-containment initiatives. As of November 2010, the year-to-date net service revenue for the hospital was $54,516,596, exceeding its budgeted NSR by $422,388. Moreover, in just over a year, the hospital has achieved a marked drop in readmissions—the all-cause readmission rate went from 14% to 12% and the congestive heart failure readmissions have gone from 30% in 2009 to 15% in 2010.

Tracking the financial savings from readmission reductions is challenging, and there are currently no penalties associated with having a high readmission rate. But patient quality of care is a great motivator for healthcare leaders, and the Patient Protection and Affordable Care Act is adding incentives by making the failure to address this problem at hospitals an expensive mistake.

Medicare estimates that nearly $15 billion a year is spent on 30-day readmissions, which is why PPACA is requiring Medicare to establish a readmission reduction plan for hospitals by 2013 and part of that directive includes the reduction of payments to specified hospitals for certain readmissions. That leaves organizations with only a couple of years to tackle this problem on their own.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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