Readmissions a hotspot for high hospital spending

Lessons from the CMMI bundled payments pilot: Cost control
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Hospitals that coordinate care along the continuum and control costs, particularly around readmissions, could gain the most from Medicare's experimental bundled payment pilot.

Hospitals vary widely in how much they spend on post-acute care, according to researchers at the Heller School of Social Policy and Management at Brandeis University in Waltham, Mass. For instance, facilities that have high costs for congestive heart failure had readmission rates of approximately 40 percent--10 percentage points--higher than low-cost facilities, according to a New England Journal of Medicine study, published online yesterday.

In a national effort to improve care and cut costs across settings, the Center for Medicare and Medicaid Innovation in August 2011 announced the Bundled Payments for Care Improvement initiative. The pilot program, scheduled to take effect January 2013, will offer Medicare bundled payments to about 100 hospitals that effectively coordinate care.

Study authors pointed to readmissions as an opportunity to coordinate transitions of care and reach out to patients after discharge and reconcile medications.

Previous research has shown that only half of patients see their primary care provider within the recommended seven days after discharge, Robert Mechanic, senior fellow at the Heller School, said in an NEJM interview.

The study, therefore, also encourages hospitals to schedule timely primary care visits.

The goal: Hospitals will take active responsibility for patients after discharge, a huge change from the way hospitals have traditionally been paid, Mechanic noted.

"It puts the accountability for the cost of the care onto the provider (hospital or medical office), rather than the payer (Medicare)," said Jay Moore, vice president for medical affairs at SSM DePaul, a St. Louis hospital applying to the program. "That's better for patients," he told the St. Louis Post-Dispatch.

If successful, the pilot program could be rolled out nationwide, CMS spokeswoman Emma Sandoe told the newspaper.

For more information:
- check out the NEJM study
- listen to the Robert Mechanic interview
- visit the CMS website on the Bundled Payments for Care Improvement project
- see the St. Louis Post-Dispatch article

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