The Low-Hanging Fruit of Hospital Readmissions is Gone. Now What?

Post-pandemic, the 30-day hospital readmission rate in the U.S. has plateaued between 14.5% and 14.7%, according to Definitive Healthcare. Although 2012’s Hospital Readmission Reduction Program (HRRP) was successful in initially driving the readmission rate lower, that era of low-hanging fruit is long gone.

This leads to a series of questions. Although many organizations have undertaken readmission reductions programs as part of their quality and care coordination programs, why hasn’t there been more of a dent made in reductions during recent years. Furthermore, up to 70% of hospitals (per CMS) are now receiving some type of penalty from the HRRP (most between 0 and 1% of Medicare revenue), yet why have these penalties not forced more serious efforts regarding readmission reduction?

One potential explanation is a dirty little secret of hospital finance. According to HealthSureHub, each hospital readmission averages $16,300, a 12% increase over a standard hospital admission. Now you don’t have to be a math major to figure out what’s going on here; it’s clear as day. The bean counters (or their consultants) have figured out that the potential penalties of a Medicare readmission don’t make up for the gain in marginal revenue for a hospital readmission: Talk about perverse incentives!

Now many organizations will talk the talk of readmissions reduction, but the bottom-line issues are clear. There are real financial ramifications to serious readmission reduction.

What is needed now to reduce hospital readmissions further is strong moral leadership. Readmissions often reflect failures of our healthcare system. They highlight gaps in care coordination, discharge planning, and engagement with patients post-discharge.

I have no doubt that in many corners of our healthcare system there are leaders and institutions that spend significant emotional, financial and human resource capital to reduce readmissions. There certainly are good actors out there. But yet this failure of our healthcare system persists.

Maybe a good answer is to pick a bucket of readmissions and commit to it. The national readmission rates for Medicaid patients are between 17-18%; for dual eligibles it’s between 21-22% (per Definitive Healthcare). These patient populations clearly are older and sicker, but did you realize that among the findings for Medicaid readmissions, areas such as schizophrenia, alcohol-related illnesses and anxiety/depression are much higher here than in other payer cohorts? (Agency for Healthcare Research and Quality). Are your behavioral health offerings areas that improvements can and should be made?

And if you want to get really cynical about this, in most parts of the country Medicaid isn’t a great payer in terms of reimbursement. Perhaps the most bang for the buck could be making headway with your Medicaid readmits in that the financial disincentives for readmission reduction aren’t as strong.

What about frequent fliers? According to Definitive Healthcare, frequent fliers (those defined as having four inpatient visits in a 12-month period) make up only 6% of the total inpatient population yet account for 51% of all readmissions? What if your readmission reduction program only centered on the 10-20 most frequent visitors? How much headway could be made if this population could be halved? How much better would your readmission numbers look? Take a look at the absolute top of your curve for frequent fliers. Create an interdisciplinary team that involves providers, clinicians, social workers and public health officials. Be creative.

We all know that more can be done to reduce readmission reductions and it’s clear from the data that results have plateaued in this area. But there are strategies that can and should be employed to reduce readmits. It’s the right thing do for patient outcomes and the overall mission for your organization.

But is the willingness there? Are Quality and Finance truly aligned? Are there incentives for finance teams to reduce hospital readmissions, even if it means associated hospital revenues in certain categories may decline? If there are, make them bigger. If not, put some real incentives in play.

To address the readmissions problem in its current state, some tough conversations need to be undertaken, but remember the mission of your organization. Do everything in your power to ensure that patients who enter your doors leave in a better condition and do all you can to ensure that they remain healthier. These readmits are people. They are members of your community. They have families and loved ones. The quality of their lives in and outside of your hospital should matter greatly.

More needs to be done to reduce readmissions. And there are strategies that can work with the right moral leadership and financial incentives.