What's the right Rx for lowering hospital readmissions?

Patients recovering from hip replacements and strokes at St. Pauls House, a short-term rehab center in Chicago's Irving Park neighborhood on the North Side, are used to seeing doctors and nurses make rounds almost daily. Doctors check that these patients, typically in their 70s or older, are taking the right medications, since prescriptions can get mixed up when they see one physician after another in the hospital. No one is rushed back to the hospital at the first sign of a fever.

This type of care isn't common at many skilled nursing facilities, where patients recuperate after a hospital stay before heading home. Patients at some facilities don't see a physician for days, even weeks, experts say.

Driving a change in these facilities' operations is a big healthcare buzzword: readmission rates. This refers to the percentage of patients who wind up back in the hospital too quickly after being discharged, whether for fever, infection or worse. Hospitals have been on the hook for a few years as the federal government pays closer attention to what happens to patients after they are discharged. Starting next year, skilled nursing facilities will be monitored more closely, too.

Beginning in October 2018, Medicare—the federal health insurance program generally for those 65 and older—will withhold 2% of all payments to skilled nursing facilities, which they can earn back by having a readmission rate likely no more than 20%, experts say. (The average readmission rate was between 5% and 10% in 2015, according to the Medicare Payment Advisory Commission, or MedPAC, a Washington, D.C.-based independent agency that advises Congress on Medicare.)

Worried about losing out, some facilities, like St. Pauls House, are investing in unique approaches. Dr. Dheeraj Mahajan, St. Pauls medical director, who has a practice based in Melrose Park, embeds a team of doctors and nurses there to keep close tabs on patients in what he calls a high-acuity unit. A year ago, St. Pauls' readmission rate was 23%. The rate had been steadily declining, then dropped to 10% after the unit launched in January.

REPUTATIONAL BOOST

So far, the facility has spent around $75,000 on its high-acuity unit, including fees to doctors and extra training for St. Pauls nurses and certified nursing assistants. It receives about $4.1 million in Medicare reimbursement a year, about one-third of its total revenue. If the facility was dinged 2% over readmission rates, that would amount to about $82,000, slightly more than its investment in the unit. But that wouldn't factor in the reputational boost: If you prevent someone from going to the hospital, they spread the word to friends and family that they had a good experience at St. Pauls.

"Recognizing the increasing needs of our patients, mixed with the increasing pressure on us to reduce hospitalizations, we wanted to find a way to handle that," says Andrew Kazmierczak, St. Pauls executive director. "We're only expecting it to get more difficult, to get more challenging patients, as hospitals are pushed (by insurers) to discharge people sooner and to get them in our hands quicker."

The financial hit to skilled nursing facilities could be significant, especially in Illinois, which is chipping away at a $14.6 billion pile of overdue bills (including ones owed to these facilities) that amassed while Gov. Bruce Rauner and Democratic state lawmakers bickered for two years over passing a state budget. In 2015, the federal government spent nearly $30 billion on services in skilled nursing facilities, according to MedPAC.

Born out of the Affordable Care Act, the mandate ratchets up the pressure on skilled nursing facilities. In Illinois, there are more than 700 such facilities, and they're mainly for-profit, says Pat Comstock, executive director of the Health Care Council of Illinois, a lobbying group. What's more, their business already is being threatened on another front: Hospitals worried about their own readmission rates are steering patients to facilities where their patients have the best shot at recovering well—and not ending up back in a hospital bed.

Hospitals are amping up pressure, too. At the three-hospital network anchored by Rush University Medical Center on the Near West Side, executives are trimming the number of facilities they refer patients to from more than 30 to potentially up to 10, says Bruce Elegant, who leads the effort and also is CEO of Rush Oak Park Hospital. To help curb its own readmissions, the system embeds nurses at a few skilled nursing facilities. Readmission rates for Rush patients who suffer congestive heart failure, for example, are down, from 50% five years ago to zero within the last six months, Elegant says, declining to name the facilities.

Medicare has withheld money from hospitals for readmissions since 2013 in an effort to boost quality. This year, medical centers nationwide are estimated to lose a total of nearly $530 million if patients with pneumonia or heart failure, among other illnesses, return within 30 days of going home, according to the Kaiser Family Foundation, a nonprofit based in Menlo Park, Calif.

Since now both hospitals and skilled nursing facilities could lose if patients return too soon, they're fortifying their relationships. Providers at the hospital and facility might discuss a patient pre-transfer, instead of just handing over a medical chart. While that might seem basic, it actually was not common practice before.

Managers of skilled nursing facilities are closely examining operations, too. Lincolnwood-based Symphony Post Acute Network, which has 28 facilities in Illinois, Indiana and Wisconsin, has invested heavily in an electronic health record system in an effort to lower its readmission rate of about 15%. The beefed-up system allows doctors who send patients off to recuperate to track how they're doing from afar, says Donna Sroczynski, Symphony president of operations.

PLAYING BALL

At the 19 skilled nursing facilities advised by Extended Care, an Evanston-based consultancy, a telemedicine program is helping bring down rates. Nurses wheel a computer into a patient's room and use it to help a doctor to remotely look inside the person's ears, nose and throat, for example. The facilities' readmission rates range from 9 to 19 percent, and about 25% of patients are on Medicare, says Extended Care CEO Ron Nunziato.

"If you have a hospital getting dinged because of what you're doing, it's in your best interest to put a correction plan in place," Nunziato says. "Otherwise, a hospital is not going to want to play ball."

At St. Pauls, which also offers assisted living and long-term care services, Kazmierczak hopes a drop in readmission rates will entice more business from doctors who influence where their patients go, and by word of mouth among people in the community.

After all, there's a hidden cost for a readmission: an empty bed.

"What's the right Rx for lowering hospital readmissions?" originally appeared in Crain's Chicago Business.