Health Reform Takes Aim at Hospital Readmission Rates

Health reform gives hospitals a big incentive to send patients home for good.

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One day last August, Tillie Hawthorne, 67, arrived at Scott and White Healthcare in Temple, Texas, struggling to breathe and swallow. A flare-up of her muscle-weakening myasthenia gravis would keep her bedridden for days, and not for the first time, as a $3,000 course of intravenous antibodies helped restore her strength. But this time, at checkout, Hawthorne got more than her discharge papers; she left with the name of her very own coach.

Chronically ill and on multiple medications, Hawthorne was a prime candidate for Scott and White's new "care transitions" initiative, aimed at saving older patients a quick return trip to the hospital. Hospital readmission rates are getting intense scrutiny now that health reformers have promised to slash spending and improve care by penalizing institutions that overdo it. Nationally, about 20 percent of hospitalized Medicare patients are back within 30 days, according to a 2009 study published in the New England Journal of Medicine. The cost: some $17 billion a year. In half of the cases, patients don't see a doctor between stays, suggesting a dismal lack of follow-up. Sometimes, they develop an infection because the medical staff didn't follow infection-control procedures. A study of heart failure patients published in June revealed that as hospital stays shortened between 1993 and 2006, the readmission rate jumped by 3 percentage points. "There are a lot of factors that can play a part," says Michael Rapp, director of the quality measurement and health assessment group at the Centers for Medicare and Medicaid Services, or CMS. "How completely was the patient evaluated in the hospital? Was the patient prepared for discharge?"

[Table: Highest and Lowest Hospital Readmission Rates]

At-home help. Scott and White aims to dot all the i's. Six days after Hawthorne went home, her transition coach, a trained social worker, stopped by to review her medications and advise her on how to recognize worsening symptoms and call the doctor for at-home help. The coach then telephoned twice over the next two weeks to answer questions and make sure Hawthorne had visited her doctor. She was hospitalized for two days in February for pneumonia. But "I haven't had a crisis in almost a year," she says. There won't be hard data on Scott and White readmits before late summer, but the preliminary evidence says they're down.

While the new Medicare penalties won't take effect until October 2012, hospitals have some experience with such a system. Uncle Sam currently doesn't pay for a readmission on the same day as a discharge, unless it's for an unrelated reason. But the new law goes much further, directing Medicare to recover payments made for unnecessary readmissions within 30 days of discharge after a stay for three conditions: heart attack, pneumonia, and heart failure. In the first year, a hospital's total Medicare payments can be reduced by up to 1 percent. The cap rises to 2 percent the next year, and 3 percent the third year. CMS eventually will add more diseases to the list.

Last summer, the agency began publishing rates for the three conditions on its "hospital compare" website. The latest data show, for example, that Florida Hospital in Orlando has a rate of 23.0 percent for heart attack patients, compared to a much-better-than-average 15.9 percent at Sarasota Memorial Hospital. In Iowa, a pneumonia readmission rate of 20.8 percent at Trinity Regional Medical Center in Fort Dodge compares with 14.6 percent at Mercy Medical Center in Cedar Rapids.

While Florida Hospital and Trinity Regional both say they're addressing their rates, they note the particular challenges of serving elderly populations. CMS generally counts all readmissions for any reason. If someone discharged after treatment for heart failure falls, breaks a hip, and is back two weeks later, the hospital takes a hit. That makes sense, argues Harlan Krumholz, director of the Center for Outcomes Research and Evaluation at Yale-New Haven Hospital, which worked with CMS to develop comparative hospital quality measures. Counting only rehospitalizations for the same condition might encourage institutions to game the system by selecting condition codes for the readmissions to avoid a penalty. And hospitalizations that don't appear related actually may be. Heart failure patients are vulnerable to a whole range of risks, Krumholz says. "Was that fall preventable? Were they too weak and not ready to go home? Were they given too much blood pressure medication, so they became dizzy and fainted?" Some planned readmissions­—a heart attack patient is readmitted for an angioplasty, say—are excluded.