Finally- A Business Case For Hospital Readmissions

A study in the New England Journal of Medicine concluded 1 in 5 elderly patients are readmitted to the hospital 30 days after leaving. This results in 2.3 million individuals being readmitted at a cost of over $17 billion to Medicare. A significant number of the readmissions are avoidable.We’ve known this has been an issue for a long time, but there was never the ability to develop the “business case” to fix it. Business cases are a big deal in healthcare. Even though we know it’s the right thing to do, if it costs in the short term or you can’t make money at it in the long term, things don’t change.

One part of The Affordable Care Act focuses on reducing avoidable hospital readmissions and will begin to penalize (reduce payment) to hospitals if their readmissions exceed certain targets. Suddenly, there is a business case and hospitals are taking steps to fix the problem and, for the most part, the initial steps to fix the problem are very simple: Make sure patients understand their responsibilities to care for themselves and get the follow-up care that is required. It may take a little more time to educate the patient or their care givers than before, but now the extra time is justified by the potential of lost revenue down the road.

While health care couldn’t make the business case before, I think about the 1 in 5 elderly patients who had to suffer being readmitted and the economic consequences that may go along with it. Somebody has to pay for it. And, I wonder why it takes threatening a reduction in what a hospital is paid to just take a little extra time to educate patients and care givers and do the right thing.

I guess that’s why it took a law to fix it. Our incentives are all screwed up.