Cost Containment Corner - The importance of redesigning care for at-risk patients
May 10, 2017
By Neil Smiley
The risk burden for hospitals has been increasing steadily since the implementation of the Hospital Readmissions Reduction Program (HRRP) in 2012. Hospitals have been working to lower readmission rates, especially for at-risk populations, in order to avoid the associated penalties. Despite the rapid expansion of electronic medical records and additional economic incentives to reduce readmissions as a result of episode payment models (EPMs), comprehensively addressing readmission risk remains a challenge.
The costs and causes of readmissions
Readmissions can be costly for hospitals. According to data provided by the Centers for Medicare & Medicaid Services (CMS), about 2,500 hospitals lost reimbursements totaling $528 million in payments for readmissions between July 2012 and June 2015 under HRRP. While some readmissions are unavoidable, others are readily addressable. Patients readmit for different reasons.
However, there are opportunities to make an impact. Medication adherence failures cost the health care system nearly $300 billion a year in additional doctor visits, emergency department visits and hospitalizations, and claim the lives of 125,000 Americans annually. Improvements in the medication adherence rates of high-risk patients directly translate to reductions in readmissions.
Another area providing an opportunity for impact is improving visibility and communication between providers, facilities and patients during and after a hospitalization. Care transitions have long been recognized as a problem area. A study published in 2016 in JAMA Internal Medicine estimated that about one-fourth of admissions are avoidable with improved collaboration across the care continuum.
As more data have become available, other risk factors have been identified. Patients with multiple comorbidities, including mental health conditions, represent a population at higher risk of readmission and are responsible for a disproportionate share of health care costs. A 2014 CMS study of dual-eligible beneficiaries noted that patients with two to five comorbidities, including mental health issues such as depression, had twice the amount of monthly expenses as compared to those beneficiaries with no physical or mental health condition on record. Associated health care costs double yet again if a patient has five or more comorbidities. Leveraging effective data analytics to proactively engage this small, yet disproportionately high-risk population with effective care models is key to reducing overall costs.
Models for redesigning care
Recognizing the diverse range of underlying challenges, clinical providers are actively exploring new and innovative care models. A group of Massachusetts hospitals are tackling the challenges associated with care gaps and mental health issues via a grant from the Massachusetts Health Policy Commission’s (HPC) Community Hospital Acceleration, Revitalization and Transformation (CHART) Investment Program.
Among the participating CHART hospitals, one awardee is focused on improving quality of care, increasing efficiencies and reducing costs by addressing gaps in the care continuum with patients that have a combination of intricate social, behavioral and medical needs in the community. The aim is to reduce 30-day readmissions for patients who have a history of excessive emergency department use, as well as additional social complexities such as behavioral health needs.
A second CHART awardee is focused on transforming the quality, safety and cost of care delivered in the hospital through collaboration with their community-based partners. All efforts are aligned with the Institute for Healthcare Improvement’s (IHI) Triple Aim of improving patient experience, improving population health and reducing the cost of health care. They are working to realize the Triple Aim by enhancing their current health technology and improving behavioral health for at-risk patients. Changes are being made in daily operations to reduce inappropriate use of acute care through evidence-based engagement.
The goal is to reduce cost and lower readmissions, but also increase patient access to the social services necessary to improve the quality of care for high-risk patients. Bundled payment programs bring additional emphasis on the costs associated with readmission rates and the need to redesign care for at-risk patients. In the past, Medicare has paid each provider based on the volume of services they provide to a patient for a given condition or procedure. This has resulted in siloed care and rewarded each provider for the quantity of services provided, not the quality of care provided. With bundled payments, individual providers across care settings have new incentives to collaborate as a network to coordinate efforts to achieve high-quality care, lower readmission rates and lower the overall cost of care.
About the author: Neil Smiley founded Loopback Analytics in 2009 to deliver an advanced Software-as-a-Service platform health care providers can use to prevent costly readmissions. The Loopback Analytics team provides proven intervention solutions that improve clinical outcomes and reduce the total cost of care.
The risk burden for hospitals has been increasing steadily since the implementation of the Hospital Readmissions Reduction Program (HRRP) in 2012. Hospitals have been working to lower readmission rates, especially for at-risk populations, in order to avoid the associated penalties. Despite the rapid expansion of electronic medical records and additional economic incentives to reduce readmissions as a result of episode payment models (EPMs), comprehensively addressing readmission risk remains a challenge.
The costs and causes of readmissions
Readmissions can be costly for hospitals. According to data provided by the Centers for Medicare & Medicaid Services (CMS), about 2,500 hospitals lost reimbursements totaling $528 million in payments for readmissions between July 2012 and June 2015 under HRRP. While some readmissions are unavoidable, others are readily addressable. Patients readmit for different reasons.
However, there are opportunities to make an impact. Medication adherence failures cost the health care system nearly $300 billion a year in additional doctor visits, emergency department visits and hospitalizations, and claim the lives of 125,000 Americans annually. Improvements in the medication adherence rates of high-risk patients directly translate to reductions in readmissions.
Another area providing an opportunity for impact is improving visibility and communication between providers, facilities and patients during and after a hospitalization. Care transitions have long been recognized as a problem area. A study published in 2016 in JAMA Internal Medicine estimated that about one-fourth of admissions are avoidable with improved collaboration across the care continuum.
As more data have become available, other risk factors have been identified. Patients with multiple comorbidities, including mental health conditions, represent a population at higher risk of readmission and are responsible for a disproportionate share of health care costs. A 2014 CMS study of dual-eligible beneficiaries noted that patients with two to five comorbidities, including mental health issues such as depression, had twice the amount of monthly expenses as compared to those beneficiaries with no physical or mental health condition on record. Associated health care costs double yet again if a patient has five or more comorbidities. Leveraging effective data analytics to proactively engage this small, yet disproportionately high-risk population with effective care models is key to reducing overall costs.
Models for redesigning care
Recognizing the diverse range of underlying challenges, clinical providers are actively exploring new and innovative care models. A group of Massachusetts hospitals are tackling the challenges associated with care gaps and mental health issues via a grant from the Massachusetts Health Policy Commission’s (HPC) Community Hospital Acceleration, Revitalization and Transformation (CHART) Investment Program.
Among the participating CHART hospitals, one awardee is focused on improving quality of care, increasing efficiencies and reducing costs by addressing gaps in the care continuum with patients that have a combination of intricate social, behavioral and medical needs in the community. The aim is to reduce 30-day readmissions for patients who have a history of excessive emergency department use, as well as additional social complexities such as behavioral health needs.
A second CHART awardee is focused on transforming the quality, safety and cost of care delivered in the hospital through collaboration with their community-based partners. All efforts are aligned with the Institute for Healthcare Improvement’s (IHI) Triple Aim of improving patient experience, improving population health and reducing the cost of health care. They are working to realize the Triple Aim by enhancing their current health technology and improving behavioral health for at-risk patients. Changes are being made in daily operations to reduce inappropriate use of acute care through evidence-based engagement.
The goal is to reduce cost and lower readmissions, but also increase patient access to the social services necessary to improve the quality of care for high-risk patients. Bundled payment programs bring additional emphasis on the costs associated with readmission rates and the need to redesign care for at-risk patients. In the past, Medicare has paid each provider based on the volume of services they provide to a patient for a given condition or procedure. This has resulted in siloed care and rewarded each provider for the quantity of services provided, not the quality of care provided. With bundled payments, individual providers across care settings have new incentives to collaborate as a network to coordinate efforts to achieve high-quality care, lower readmission rates and lower the overall cost of care.
About the author: Neil Smiley founded Loopback Analytics in 2009 to deliver an advanced Software-as-a-Service platform health care providers can use to prevent costly readmissions. The Loopback Analytics team provides proven intervention solutions that improve clinical outcomes and reduce the total cost of care.