Here it is day four of National Health IT Week and there have been lots of interesting things to talk about and be excited for the prospects of Health IT up to this point: EHRs capturing lots of great data; analytics and predictive modeling to discover insights we’ve not been able to have previously; and where the hype of big data meets reality. But having access to data and being able to do cool things with it to deliver higher value care is only half the story – the other half is how our reimbursement system is also changing to align financial incentives with quality and value.
We’re seeing the early beginnings of value-based reimbursement changing behavior, with one of the more intriguing being the Center for Medicare and Medicaid Services (CMS) Hospital Readmission Reduction Program (HRRP). Under this program, CMS calculates a risk-adjusted ‘expected readmission rate’ for each hospital in the country for congestive heart failure (CHF), acute myocardial infarction (AMI) and pneumonia. If a hospital’s actual readmission rate exceeds the expected rate, their Medicare reimbursements are penalized for the following year by up to 1% in 2013, 2% in 2014, and 3% in 2015. Given that hospitals typically receive 50% or more of their revenue from CMS, these penalties rapidly add up to real money and are prompting meaningful action on the part of hospitals to understand the causes of readmissions and address them proactively. But what’s intriguing is to get beyond thinking of the HRRP as a penalty-imposing program, and instead think of it as an outcomes-based reimbursement program.
What CMS has really done is effectively say the payment for a CHF admission, for example, is not just for the individual admission, but rather a payment to keep the patient out of the hospital for the next 30 days. And not just keep them out of the hospital for CHF, but for any reason since ‘readmission’ is all-inclusive of most any reason for the readmission and not limited to just the original reason for discharge. This requires some radical rethinking of how hospitals and health systems measure quality and value, since it brings to bear things they have traditionally had little control over such as patient compliance with discharge instructions and adherence to best-practices by physicians in the community. Even though it may not be directly under the hospital’s control, hospitals for the first time have a meaningful financial incentive to encourage patients and others to ensure appropriate follow-up care and activities are accomplished.
Tomorrow we will be a quick wrap-up and a pat on the back for all the tireless effort of an entire industry in the midst of unprecedented change.