Why are Hospital Readmissions so High?

Hospital readmissions can be defined as episodes when patients who had been discharged from a hospital are admitted again within a specific time interval. Hospital readmission rates are usually used as outcome measures in health services research as they provide a benchmark for health systems. A common problem in the healthcare industry is that hospital readmissions are usually so high. As they continue to seek to reduce it, it begs the question, Why are Hospital Readmissions so High? Hospital readmission measures have been touted not only as a quality measure but also as a means to bend the healthcare cost curve.

The Affordable Care Act (ACA) established the Hospital Readmission Reduction Program (HRRP) in 2012. Under this program, hospitals are financially penalized if they have higher than expected risk-standardized 30-day readmission rates for acute myocardial infarction, heart failure, and pneumonia. Before 2012, hospitals had little direct financial incentive to reduce readmissions. For Medicare beneficiaries with inpatient stays, hospitals receive payment using the inpatient prospective payment system (IPPS). This payment, based on a diagnosis-related group, covers the inpatient stay as well as any outpatient diagnostic and admission-related outpatient non-diagnostic services provided by the institution on the date of the patient’s admission or within 3 days immediately preceding the date of admission.

Notably, this payment does not include post-discharge care or interventions that would potentially reduce the incidence of readmission. In the fiscal year 2013, eight percent of the hospitals penalized were hit with the maximum one percent penalty. CMS estimated the total of all penalties to be $290 million. In the fiscal year 2014, only 0.6 percent of hospitals were penalized the maximum, but with the maximum penalty doubling to two percent, total penalties were still $227 million. In fiscal year 2015, 1.2 percent of hospitals received the maximum penalty, but with the rate at three percent, CMS estimated the total penalties at $428 million. The average penalty among those hospitals penalized rose from 0.42 percent to 0.63 percent over those three years.  This amounted to between $125,000 and $164,000 per hospital.

The persistently high 30-day readmission rates among many US hospitals, and the societal and patient impacts, highlight the need for a continued study to better understand factors which affect rapid patient readmissions. Much of the previous research in this area has relied on analysis of medical claims data. In contrast, this study obtained and analyzed existing readmitted patient survey data collected for administrative purposes, with survey responses reported herein.


Analytics Applications

Once an EDW is in place, the organization has a foundation to adopt analytics applications. Analytics is a powerful tool that enables non-technical users to make sense of the data and discover the best areas to make changes.

There are different types of improvement applications that provide an array of solutions. For example, clinical analytics and decision support applications permit clinical improvement teams to focus attention on specific clinical measures needed to manage baseline population health processes and outcomes. Financial decision support applications address the basic measurement needs of the finance department in a healthcare setting. Operations and performance management applications allow operations leaders and improvement teams to focus attention on increasing operational and workflow efficiencies, improving standardization, and reducing waste. Effective improvement applications apply to different categories, including care management and patient relationships, population health and accountable care, and research informatics.

Technology: The Right Technology Helps with Reducing Readmissions

Reducing readmissions contributes significantly to lowering the overall costs of healthcare in U.S. hospitals, but tracking the metrics and reporting the results can be onerous. The process is greatly facilitated by analytics applications supported by an enterprise data warehouse to guide improvement projects. These are the keys to developing best practices that will ultimately help hospitals reduce readmissions, and avoid the penalties that result from noncompliance.