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Customer Experience and Design

Pay-for-performance and Readmissions Solutions

According to the AHRQ, there are an approximate 4.4 million preventable discharges which contribute to $30 billion in healthcare costs annually. Beginning in October 2012, the Centers for Medicare & Medicaid will begin punishing hospitals by withholding reimbursements to hospitals with higher-than-average readmission rates for patients with three types of diagnoses or health issues:
1. Heart attacks
2. Heart failure, and
3. Pneumonia
The penalty will begin with a deduction of 1% of Medicare and Medicaid’s regular reimbursement rate and rise to 3% within a couple years. A total of 4,626 (7%) hospitals have higher-than -expected readmission rates in these three categories. (Average readmission rates are 19.8% for heart attacks, 24.8% for heart failure patients and 18.4% for pneumonia patients.)

CMS is focusing on readmission rates, because readmissions are costly and a whopping 9-48% of all readmissions are deemed “preventable”. Preventable readmissions are categorized as readmissions caused by indicators of sub-standard care during hospitalization, such as discharging patients before they are stable, poor resolution of the health issue and inadequate post-discharge care. However, random trials have shown that patient education is one of three inputs that reduce readmissions by 12% to 75%.

What does this mean to providers? It means two things: First, some healthcare issues may be caused by a “failure to communicate”. Second, accountable care is most effective when accountability trickles-down to patients. Tools that enable better communication throughout the continuum of care and educate the patient must be explored. And these education tools need to be combined with other pre-discharge actions such as a scheduled PCP follow-up appointment and sending their medical records to the PCP within 24-hours of discharge to reduce readmission rates by 30%.

The point here is simple: Unnecessary readmissions are going to become painful events for providers. Solutions that reduce unnecessary readmissions will ensure a healthier patient and healthier bottom-line. Non-traditional methods such as telemedicine, mobile technologies and technologies that close gaps in the continuum of care must be explored.

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