The Floggings Will Continue Until Morale Improves

August 2015

Last year the Centers for Medicare and Medicaid Services (CMS) announced penalties for thousands of hospitals that had high readmission rates as part of its Readmissions Reductions Program.  This year a total of nearly 2,600 U.S. hospitals will face Medicare payment penalties for excessive 30-day readmissions for five selected conditions under the same program.[1] This represents essentially no change in the number of penalized hospitals from one year ago. The old adage that “the floggings will continue until morale improves” seems to be appropriate here.

This seems doubly so for the 800 or so hospitals that will join the mandatory Comprehensive Care for Joint Replacement (CCJR), a bundled payment initiative that begins in January of 2016.  That’s because the CCJR bundled payment will cover 90 days following discharge.  That means hospitals with high readmissions rates could have their margins hit in the bundle and then hit again with a CMS penalty.  Clearly, this is bad news for hospitals with high readmissions.  So let’s talk about how you can begin to reduce them.

First, to redesign care for eliminating preventable readmissions requires that the frequency and reasons for readmission be identified. This is no easy feat.  Recent data from the Department of Surgery at the Johns Hopkins University School of Medicine indicates that up to 40% of surgical readmissions at 90 days occur in hospitals other than the site of the index procedure. Furthermore, hospitals and surgeons may be unaware of the patterns and causes of readmissions in their experience, especially when they occur at other facilities. So hospitals and their surgeons must be proactive in understanding the dynamics of readmissions in order to implement corrective action.  Begin with your own data.  It may be incomplete, but it can start to tell you who is coming back and why.

Second, catalogue the causes of readmission.  Complications of the prosthetic device, infections at the surgical site and other hospital-acquired infections, cardiopulmonary complications, and gastrointestinal issues represent the major events in readmission. These issues have different patterns in different hospitals, and generic solutions may not meet the needs of your hospital or practice.  Still, it makes sense to identify the incidence of these major causes in your hospital.  We have found that post-discharge morbidity and readmission begins with complications during the index hospitalization. In addition, coordinated follow-up strategies and enhanced patient communications following discharge can permit early identification and effective rescue of untoward events before readmission is necessary.

To be sure, all readmissions are not preventable and certainly can be the consequence of treating a high-risk Medicare population.  However, our risk-adjusted comparative studies of hospital performance indicate that many are preventable because effective performing hospitals are achieving low readmissions now.  By reducing their readmissions these hospitals have also reduced their costs and improved their margins.  That points to the potential of a better approach for the CMS.  Instead of relying so heavily on the “stick” of Medicare payment penalties, maybe they can use the “carrot” of enhanced margins?  It might be more cost effective than another flogging.  And cost-effectiveness is what we are all about.  Please give us a call if you would like to learn more.

[1] Rau J: Half of the Nation’s Hospitals fail again to escape Medicare’s readmission penalties. Kaiser Health News. August 3, 2015. http://khn.org/news/half-of-nations-hospitals-fail-again-to-escape-medicares-readmission-penalties/.

Donald Fry

Donald E. Fry, M.D. is Executive Vice President for Clinical Outcomes Management at MPA Healthcare Solutions, Adjunct Professor of Surgery at Northwestern University, and Professor Emeritus of Surgery at the University of New Mexico School of Medicine. At MPA Healthcare Solutions, Dr. Fry provides clinical leadership in analyzing and evaluating clinical performance, guiding quality improvement, and creating incentives for coordinated, cost-effective care.

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