Reduced readmission rates: A way to lower health costs?
Blog Author: Kashmira SuraliwallaPosted: Wednesday, February 3, 2016 - 11:07
While readmission rates in other countries are falling, those in Canada remain the same. Since there is no magic bullet to solve this problem, one way to reduce health care costs would be to reduce hospital readmissions that tie up hospital beds and prevent other patients from accessing needed care. This could be done by implementing the US Medicare program’s Hospital Readmission Reduction Program (HRRP), which penalizes hospitals financially for their readmission rates.
Jason Sutherland, an associate professor in the Centre for Health Services and Policy Research in UBC’s School of Population and Public Health, and his colleagues gathered readmission data from 18 hospitals in BC pertaining to three common conditions—heart attack, heart failure, and pneumonia. Using the formula from the US system, the researchers calculated whether the hospitals had a higher readmission rate over a 3-year period (2010—2013) than would be expected. Their calculations showed that 14 of the 18 hospitals had a higher readmission rate for at least one of the conditions, while some had higher readmission rates for all three conditions. Results also show that readmissions cost the province approximately $13 million for these three conditions over the 3-year period (not including physician fees). Researchers noted that if HRRP was applied in BC many hospitals faced a claw back of less than $40 000 and the largest penalty was $217 000.
Further, researchers felt that while this could be a technically feasible application, it was not the best option because the financial impact would be too small to motivate hospitals to make changes. They felt that introducing new programs in hospitals to reduce readmissions would likely be more effective in reducing unnecessary spending and getting more value for the health care dollars and improving the quality of care for patients. The related study, "Improving hospital quality through payment reforms," was recently published in Healthcare Management Forum.
This posting has not been peer reviewed by the BCMJ Editorial Board.