Curbing preventable hospitalizations won't contain Medicare costs

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While 10 percent of Medicare patients account for 73 percent of acute care treatment costs, those high-risk patients didn't incur preventable hospital treatment any more frequently than other Medicare patients, a study published online Monday by the Journal of the American Medical Association found.

The findings strike a blow to some healthcare cost-containment strategies, and suggest those strategies focused on improving outpatient chronic disease management may ignore the biggest and most expensive problems for high-cost Medicare patients, the authors concluded.

Although some expensive health episodes such as heart attacks are potentially preventable, "their prevention would likely require a long time horizon and substantial investments in population wellness," they said, with the payoff likely taking years.

Recent cost-control efforts that focus on enhancing outpatient services to reduce emergency department visits and hospitalizations miss the point because they target a small proportion of overall costs for those high-risk patients, the authors said.

What might work better is to redesign care delivery to reduce per-episode costs for high-cost diseases, according to the findings. The push toward bundled payments, among other policy changes, might "spur such innovation in inpatient cost control." Shared-savings programs, such as accountable care organizations, also might help reduce preventable admissions and lower hospitalization costs, they added.

Cost-reform efforts will need to include both stronger incentives for providers and beneficiaries and sticks to discourage nonparticipation, according to another recent analysis published in the May issue of the journal Health Affairs.

"Ending fee-for-service payment in favor of accountable care organizations and bundled payment once and for all is unlikely to be feasible for quite some time, but gradually increasing disincentives for providers that do not participate in reformed payment approaches is a practical way to move forward," wrote Paul B. Ginsburg, president of the Center for Studying Health System Change.

For more:
- read the JAMA study

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