Insurers Attempt to Reduce Readmissions

February 23, 2017

When a patient has to be readmitted to a hospital, the most common reason is because there was a gap in their care after the initial admission. Critics of the healthcare system believe that hospitals aren’t doing enough to readmission because they get paid the same way whether it’s a first admission or a return.

But insurers are trying to change that.

On Wednesday, July 11th, a health insurance company called Highmark announced plans to improve incentives for hospitals to reduce the number of readmissions, many of which, they content, are preventable. Their effort will be concentrated on 90 hospitals in Pennsylvania and West Virginia, all of which are participants in Highmark’s “pay for performance” program. Among them are Holy Spirit Health System and PinnacleHealth, in the Harrisburg, PA area.

According to Page Babbit, Highmark’s director of provider engagement, hospitals that don’t meet the insurer’s standard will receive 1-3 percent less money from the insurance company. Since Highmark currently covers the medical care for about a million people in central Pennsylvania, that change isn’t insignificant. In fact, Babbit explains, it will make a “�distinct difference in getting people serious.”

Specifically, Highmark’s effort is focused on patients who are readmitted to the hospital within a month of the end of their original stay. Such scenarios, the Pennsylvania Health Care Cost Containment Council says, represent about 14% of all adult hospital stays in 2010, about 6% of which were related to an infection or other complication, although planned readmissions – patients who have cancer, or heart patients who require surgery after a heart attack – are also included in that total.

Nevertheless, unplanned readmissions are a huge contributor to higher health care costs, to the tune of an additional $500 million a year paid by Medicare in Pennsylvania alone, and that number doesn’t include the cost of readmissions covered by private insurance companies.

How to Reduce Readmissions

According to Babbit, the best way to reduce readmissions is to recognize that most of them are preventable, and take action before readmission is necessary. Most cases, she explains, involve patients who don’t follow their after-care instructions, neglect their medications, or skip the recommended follow-up appointments with their regular doctors, while other typical reasons for readmission include poor communication between the hospital and a nursing home or home health agency responsible for post-discharge patient care.

Highmark’s plan, then, is based on the assumption that hospitals can address many of those reasons up-front, by increasing patient education, scheduling necessary follow-ups before a patient is discharged, and improving communication with after-care facilities like nursing homes.

As well, hospitals participating in Highmark’s “pay for performance” program will no longer have the free choice of how to target improvement efforts – now, they must pay attention to the reduction of readmissions.

PinnacleHealth is one hospital that has already begun targeting readmissions, and now has a readmission rate that is lower than the average for their state. According to Joan Silver, Pinnacle’s vice president for quality, her hospitals efforts focus on things that happen after a patient is discharged.

Now, patients are phoned within 48 hours and asked how they’re doing, and whether they’ve obtained their prescribed medications or scheduled required follow-up appointments. Up to three calls are made for each patient , Silver says, and about 70% of them are contacted successfully.

Highmark’s efforts to reduce readmissions aren’t a local phenomenon, however. Instead it’s a proactive response to the 2010 Affordable Care Act, which includes plans to penalize hospitals that don’t sufficiently address the number of readmissions, to the tune of a one percent initial penalty which could rise to three percent for hospitals that consistently have high readmission rates.

The goal of all this? It’s to shift the payment model from paying for the number of patients to paying for the quality of patient care.