Archived Insight | February 1, 2020

Strategies Sponsors Can Use To Reduce Hospital Readmissions

Hospitals provide patients with some of the best care modern medicine can offer, but it can come with a hefty price. Inpatient hospital admissions usually rank among the highest expenses on your health plan’s balance sheet.

This means avoiding preventable hospital readmissions (defined as patients going back to the hospital within 30 days of discharge) needs to be a top priority. Here are some strategies to help reduce the number of participants who are readmitted to the hospital.

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What causes hospital readmissions?

People go to the hospital for all sorts of reasons, but the research shows patients suffering from psychiatric disease, substance abuse, or chronic illness tend to be readmitted more often than other populations of patients.

As a plan sponsor, how do you manage the risk of hospital readmissions with your most vulnerable participants? By holding your carrier responsible for the actions of its healthcare facilities in their network. Here’s what many hospitals do to exacerbate the problem of readmissions.

  • Discharging patients prematurely and without proper education:  These are the most common reasons why a readmission may happen, as the patient does not know what instructions to follow at home. In cases like this, the hospital typically does not engage in post-discharge support.
  • Committing therapeutic errors, including mistakes with prescriptions:  Patients sent home without a prescription for necessary medication, a duplicate prescription for medication they have at home or with inadequate monitoring for a drug’s adverse side effects often leads to hospital readmissions
  • Failed handoffs to other medical professions: Outdated (read: non-electronic) record keeping can cause important medical information to slip through the cracks when transferring the patient’s care to a primary care physician or other medical profession post-hospitalization.
  • Lax hospital procedures lead to patients getting infected or injured in the hospital: Issues such as ulcers (bed sores), falls or infections should be captured in follow-up patient support and communicated to the hospital. Instead, injuries and infections acquired in the hospital can land the discharged patient back to where they started. A large percentage of these issues are considered “never-events” or avoidable by Medicare and most plans.


These actions reduce hospital readmission rates

Readmission rates are key metrics for measuring performance of hospital, health plans, facilities, physicians and accountable care organizations (ACOs) because many have financial rewards and penalties tied to them, especially under Medicare. 

Here’s what you as a plan sponsor can do to help reduce hospital readmissions for your participants.

Contract with discharge support services

These services, which your carrier or a third party vendor can often provide, monitors patients during discharge and provides help when needed. You should also make sure your carrier uses predictive data to determine which patients have a greater chance of needing these services.

Create a culture of responsibility

Hospital readmission rates create a huge burden on your plan’s financials, so create metrics with your carrier that penalizes them for including in their network hospitals with high readmission rates. You should also consider dropping network hospitals with excessively high readmission rates from your network altogether.

Educate your participants on wellness

You should also try to head off hospital readmissions where they start—the health of the patient. A well-planned communications campaign using your website or a mobile app informing participants on how to lower their risk for hospital admissions can pay dividends in saved costs.

Enforce and make sure that the carrier uses predictive criteria for readmissions

There are certain known risk factors that result in readmissions. The list includes clinical factors such as

  • Using high-risk medication
  • Polypharmacy
  • Having more than six chronic conditions
  • Specific clinical conditions such as uncontrolled diabetes, heart failure, stroke, cancer, or depression

Other risk factors are demographic or logistical in nature, such as:

  • Prior hospitalization, including unplanned hospitalization
  • Poor health literacy
  • Poor or no social contacts
  • Lower socioeconomic status
  • Discharge against medical advice

For a plan with inpatient hospital costs that are 30% of total costs and high readmissions rates, significant overall plan savings can be achieved by reducing these rates to industry best practice levels.

While not every hospital readmission is avoidable, the strategies we discussed here can help you reduce the number of expensive, preventable readmissions from occurring to keep your participants—and your plan’s finances—healthy.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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