Hospital Readmissions Reduction Program: Keys to Success
Medicare penalizes hospitals when they don’t meet readmission benchmarks. Although hospitals reduced avoidable readmissions for Medicare patients by about 100,000 in 2015, and by a total of 565,000 since 2010, there’s still much room for improvement. The federal government has estimated the annual cost of Medicare readmissions to be $26 billion per year with $17 billion of that considered avoidable.
CMS first addressed this financial problem back in 2009 by publicly reporting hospital readmission rates on the Hospital Compare website. CMS claimed the public reporting of readmission metrics would increase the transparency of hospital care, help consumers choose a care venue, and provide a benchmark for hospitals in their quality improvement efforts.
In 2012, CMS launched the Hospital Readmissions Reduction Program (HRRP), which began to penalize hospitals with high rates of readmissions for acute myocardial infarction, heart failure, and pneumonia. In 2013, the Medicare payment reduction (penalty) was one percent of the base rate. This increased to two percent in 2014 and was capped at three percent going forward from 2015. Also in 2015, chronic obstructive pulmonary disease (COPD) and total hip and knee arthroscopy were added to the program.
Results of the Hospital Readmissions Reduction Program
In fiscal year 2013, eight percent of the hospitals penalized were hit with the maximum one percent penalty. CMS estimated the total of all penalties to be $290 million. In fiscal year 2014, only 0.6 percent of hospitals were penalized the maximum, but with the maximum penalty doubling to two percent, total penalties were still $227 million. In fiscal year 2015, 1.2 percent of hospitals received the maximum penalty, but with the rate at three percent, CMS estimated the total penalties at $428 million. The average penalty among those hospitals penalized rose from 0.42 percent to 0.63 percent over those three years. This amounted to between $125,000 and $164,000 per hospital.
As much as we’d all like to have an extra $164K in our wallets, it’s a drop in a bucket compared to overall Medicare expenditures and the massive budgets of many of the health systems affected. Absorbing these losses may not be a challenge for some hospitals.
Even if hospitals can absorb the financial hit, they still need to track reporting metrics—and doing so will become increasingly complex.
Keeping up with Tracking and Reporting Demands
CMS places its share of tracking and reporting demands on the nation’s hospitals, but the burden increases with pressures from other entities, as well. State and federal regulations, licensing, private payer initiatives, and accreditation bodies all require reports. Plus, consumers expect more transparency in the Digital Age. In turn, standards of transparency demand additional reported metrics that consumers use to make care decisions. Payers and providers also rely on these reports to make business decisions.
Solution, Part 1: The Enterprise Data Warehouse
So what can a hospital do to keep up with these rising demands? The answer is straightforward: adopt a healthcare enterprise data warehouse (EDW) to meet the many reporting demands. Here are a few examples of how an EDW helps solve the reporting burden:
- Users can access integrated views of financial, clinical, and operational data from throughout the enterprise.
- Data collection and the analysis process become automated. Manual data collection and tracking simply won’t work in the future. These manual processes consume time and resources and often result in inaccurate or missing information.
- Users can collect data from across the enterprise to integrate clinical, financial, and operational data from inpatient and outpatient settings.
- Reports are generated automatically, ensuring that the right data gets to the right audience at the right time.
The benefits of an EDW don’t end with reporting, though. An EDW delivers the business intelligence tools a hospital needs to drive real cost and quality improvement initiatives. In specific, an EDW enables health systems to:
- Establish a baseline for all quality measures
- Perform analytics to pinpoint opportunities for improving quality
- Track the success of improvement interventions
- Measure and sustain results over the long term
Solution, Part 2: Analytics Applications
Once an EDW is in place, the organization has a foundation to adopt analytics applications. Analytics is a powerful tool that enables non-technical users to make sense of the data and discover the best areas to make changes.
There are different types of improvement applications that provide an array of solutions. For example, clinical analytics and decision support applications permit clinical improvement teams to focus attention on specific clinical measures needed to manage baseline population health processes and outcomes. Financial decision support applications address the basic measurement needs of the finance department in a healthcare setting. Operations and performance management applications allow operations leaders and improvement teams to focus attention on increasing operational and workflow efficiencies, improving standardization, and reducing waste. Effective improvement applications apply to different categories, including care management and patient relationships, population health and accountable care, and research informatics.
Even though there are many types of analytics solutions, they all share one important trait: non-technical users gain an easy and intuitive way to ask complex questions of the data stored within the EDW. Nobody needs to be a programmer or wait weeks or months in a queue for a custom-built report.
Reducing Heart Failure Readmissions with an EDW and Analytics
From improved reports to driving improvements, the benefits of an EDW and analytics applications are many. In fact, one large health system reduced heart failure readmissions by using an EDW as a foundation for its advanced analytics applications.
First, the system implemented an EDW to quickly pool financial, operational, patient satisfaction, and clinical data from the inpatient EHR and other major information systems. With the technology infrastructure in place, the team in charge of the initiative crafted a specific, measurable objective: to achieve by October 2014 a 30 percent reduction in the 30-day all-cause readmission rate and a 15 percent reduction in the 90-day all-cause readmission rate for patients with heart failure; also, to sustain the reductions through 2016.
Next, the team outlined specific interventions based on best practices that would move them toward their goal. Interventions included:
- Medication reconciliation. Within 48 hours of discharge, a physician reviews a list of the patient’s medications with explicit instructions to the patient about how to properly take them.
- Post-discharge appointments. Before being discharged, nurses schedule patients for follow-up care. When possible, patients at high risk for readmission are scheduled to be seen within seven days of discharge.
- Post-discharge phone calls. Within a specified timeframe following discharge, a member from the care team calls patients to assess their condition and answer any questions.
An integrated dashboard was created in the healthcare EDW platform for each of the three interventions. This enabled clinicians and administrators to track where the interventions were being applied. They could also track the impact the changes were having on readmissions. Even more, the EDW and analytics applications allowed the team to assess the impact of the interventions on costs and patient satisfaction.
The results have been impressive. Just six months after implementing the EDW, the health system achieved:
- A 21 percent seasonally adjusted reduction in 30-day heart failure readmissions
- A 14 percent seasonally adjusted reduction in 90-day heart failure readmissions
- A 63 percent increase in post-discharge medication reconciliation
It is well on its way to meeting—and even exceeding—its objective.
The Right Technology Helps with Reducing Readmissions
Reducing readmissions contributes significantly to lowering the overall costs of healthcare in U.S. hospitals, but tracking the metrics and reporting the results can be onerous. The process is greatly facilitated by analytics applications supported by an enterprise data warehouse to guide improvement projects. These are the keys to developing best practices that will ultimately help hospitals reduce readmissions, and avoid the penalties that result from noncompliance.
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