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A Hospital Prevents Readmissions, but Threatens Revenue

Cheryl Clark, for HealthLeaders Media, February 10, 2011

The number of children to be included has not yet been determined.

Asthma is the leading cause of hospitalization at Children's Hospital, and children in low-income neighborhoods right near the hospital have rates as high as one in four. Seventy percent of children followed by CAI are covered by MassHealth.

Children's Hospital Boston would like to share their success with all providers who offer pediatric care. "But we have a challenge bringing this program to scale, taking it out of the four walls of Children's Hospital's laboratory of innovation and research," Greenberg says.

"We need to make it accessible to community health centers, community hospitals, to the mom and pop pediatric primary care setting with two or three physicians – those are still very much the norm. And we need to develop infrastructure and financing systems to do that."

Somehow, healthcare policy leaders need to figure out how to financially incentivize hospitals to do what Greenberg and Woods suggest, to reach beyond their walls to reduce the need for their services. Children's Hospital Boston is one cool example of an institution that is doing the right thing, but others won't follow unless they have the resources to do so.


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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1 comments on "A Hospital Prevents Readmissions, but Threatens Revenue"


Neal Colburn (2/10/2011 at 3:31 PM)
The opportunity to align quality outcomes with financial incentives was provided under global capitation. Having once been president of a community health center controlled HMO, I thought that it would obtain buy-in from hospitals in a collaborative program investing in quality practices and patient management, as noted in the article, improving quality; raising the health status of our patients; and thereby, reducing cost; then reivesting part of the savings in more cost-saving programs. I thought that hospital administrators would understand that improving the health of the community; reducing hospitalization while retaining the same capitated revenue would be attractive. Unfortunately, hospital CEOs and CFO would only consider fee for service payments for procedures, services and bed days, albeit with some small discounts for volume - the opposite of the hoped-for incentive direction. As a result, the opportunity to work collaboratively and align financial and quality incentives, and possibly programs was lost in most cases. This was repeated in market after market. The HMO was able to obtain buy-in from many of the primary care providers with quality process incentives and capitation. Many were able to significantly bend their cost curve, but with their small portion of the resources they were not able to substantially impact the total system cost. Now the federal government and other payers are betting on the ACO and Patient-Centered Medical Home models with less control over global resources but also less downside risk. Hopefully, the incentives will be well directed and appropriately valued to drive significant change. However, it will take more enlightened vision, collaboration and decision-making than appears to have been the experience in the past. Let's work together this time and make it work.