Hospital Readmissions: A Hidden Healthcare Cost

By Mike Genau

As we learned on the Harvard Business Review webinar, “How Not to Cut Healthcare Costs,” providers frequently turn to five main cost-cutting measures that ultimately deliver a lower value at a higher expense. In addition to these five measures, hospital readmission is another area of inefficiency worth consideration.

This year, Medicare has already fined a record of 2,610 hospitals for readmitting patients within a month of being discharged with total penalties estimated at $428 million. While there are many high cost drivers in the healthcare system, hospital readmissions are one area where providers, payers, patients and even medical technology companies such as Medtronic can work together to reduce unnecessary hospital admissions and transition from a fee-for-service to a fee-for-value approach to care.

2,610 HOSPITALS WERE FINED $428M BY MEDICARE for readmitting patients within one month of discharge

Heart failure, which affects 5.1 million Americans, is one of the main causes of hospital readmittance. These patients are readmitted to the hospital an average of 1.23 times a year, according to a 2013 study, which increases mortality rates as well as contributes to Medicare penalties.

As discussed on the Harvard Business Review webinar, one potential source of the problem is the way hospitals attempt to reduce costs and boost productivity through higher patient throughput. Doctors say spending more time with fewer patients leads to better outcomes, since they can educate patients on what they need to do to take care of themselves once they leave the facility.

Increasing the amount of time patients spend with doctors and in hospitals may not be realistic in our current healthcare environment. However, one solution could be better monitoring at home. At Medtronic we are seeing examples of how telehealth can allow a nurse to follow up with three times as many patients after they leave the hospital than they could in person, while ensuring similar levels of attention and care.

A pilot program in Colorado involving Medtronic Cardiocom’s telehealth solution helped reduce heart-failure-related hospitalizations by 62 percent during a 30-day period following the initial hospital stay.

Even beyond a telehealth system’s ability to reduce readmissions within a month, such a service has shown a longer-term impact on patient care. Another recent study by a group of hospitals in Illinois demonstrated that 94 percent of patients involved with a telehealth program made healthier decisions going forward.

Unfortunately, providers have been reluctant to adopt telehealth methods in the past because they felt it wasn’t as effective as in-person interactions. In addition, payers didn’t reimburse physicians for the time they spent counseling patients remotely, further increasing the barrier of adoption.

No one benefits when patients have to come back to the hospital shortly after they leave. By adopting telehealth technologies and partnering with solution providers such as Medtronic’s Integrated Health Solutions business, patients can reap the benefits and hospitals can also address other potential sources of revenue drain.

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Mike Genau 
Senior Vice President & President, U.S. Region
Medtronic