Reducing Hospital Readmissions in Canada- Are Penalties for Hospitals the Right Answer?

Since 2012, American hospitals with high readmission rates have faced serious financial penalties. These penalties are part of a controversial initiative called the Hospital Readmission Reduction Program (HRRP). Here in Canada, unplanned hospital readmissions, especially those tied to chronic diseases are a serious problem. These events can be extremely costly and have negative health implications for patients, making them a real threat to the healthcare system.

Providing appropriate discharge planning, care management advice, and follow up has the potential to reduce readmissions. This fact is undeniable. But what’s the best way to motivate hospitals to do everything they can to ensure smooth transitions? In this post, we’ll look at America’s HRRP and consider how similar penalties could work in the Canadian healthcare system.

The Real (High) Cost of Hospital Readmissions

It’s a serious dilemma. Governments want to cut healthcare costs, without sacrificing high-quality patient care. In recent years, Ontario has worked to achieve both goals by moving care increasingly into patient homes. Beyond the cost savings, there’s good reason to make this shift. For example, chronic patients often do best at home, where they can remain independent while managing their illnesses on an ongoing basis.

Unfortunately, things don’t always turn out this way. Without the right discharge planning and follow-up care, many patients wind up right back in the hospital or emergency department. The results are costly.

According to the Canadian Institute for Health Information (CIHI), 1 in 11 patients will be readmitted to the hospital within 30 days of discharge. These unplanned readmissions cost the system $2.3 billion annually. Clearly, something needs to be done. And while it’s true that a person’s recovery depends on many factors, one thing is clear: Providing chronic patients with appropriate planning, support, and follow-up gives them the best possible chance of thriving in their homes.

In contrast, poorly-handled transitions from one care environment to another can cause unfavourable patient outcomes – including unplanned hospital readmissions. Luckily, the Ontario government is taking promising action. Reducing unplanned admissions is one of the aims of the province’s Health Links initiative. The strategy involves paying closer attention to coordinating care for the 1-5% of patients who use 34% of Ontario’s healthcare expenditures. But do such initiatives go far enough? Given the massive threat that unplanned readmissions pose, should the government look at using deterrents to encourage hospitals to do more to prevent them?

America’s Hospital Readmission Penalties: Do They Work?

In October 2012, America’s Hospital Readmission Reduction Program (HRRP) took effect. The program imposes financial penalties on hospitals with high unplanned readmission rates. Under HRRP, hospitals lose a percentage of their net inpatient Medicare payments if their readmissions exceed the national average. During the first year, 30-day readmission rates were counted for patients who suffered from heart attack, heart failure, or pneumonia. Penalties had a 1% cap. The cap rose to 2% in 2014 and 3% in 2015. Additional conditions have also been added to the list: chronic obstructive pulmonary disease (COPD), hip and knee replacement, and coronary artery bypass graft surgery.

In some respects, the program has been a success. There’s evidence that readmission rates for medicare beneficiaries have fallen across the country since HRRP was implemented. Improvements in discharge planning and followup care have undoubtedly played a role. But just how significant that role has been is debatable. According to some claims, several hospitals have found a loophole: placing patients “under observation” to avoid official readmitting them. This allows facilities to avoid the penalties; it also costs patients more. This loophole isn’t the only challenge HRRP has faced. Critics have maintained that the program unfairly penalizes hospitals that serve large volumes of low-income patients. They argue that these patients are more likely to be readmitted due to lifestyle factors that are outside of clinician control.

Weighing Our Options

Currently, the Canadian healthcare system does not enforce hospital readmission penalties. The question of whether Canada should adopt penalties is complex. On the one hand, unplanned readmissions are high. With chronic diseases on the rise, these rates certainly aren’t going to decrease – not unless appropriate action is taken. That said, the differences between the American and Canadian systems are substantial. Could policymakers in our country learn enough from the mistakes of the United States to make the program work? Because, although HRRP has reduced hospital readmissions, the program isn’t without its problems.

One major issue relates to the difficulty of defining a preventable readmission. Estimates of the percentage of readmissions that count as “preventable” vary widely. There’s also the question of how to create rules that work for both urban and rural hospitals. Statistics indicate that rural patients are more likely to wind up in their emergency departments than patients in the city due to a lack of other healthcare facilities. Does it make sense to punish facilities that face unique problems due to geographical location?

Perhaps the most important question is whether the government wants hospitals to focus on avoiding penalties. Wouldn’t it be better if they focused on improving patient care? And do policymakers want to spend precious time closing legislation loopholes? There may be better ways to encourage smooth patient transitions. Providing funding for innovative care models is one possibility. Ontario is already making progress on this front.

Alternative Solutions For Reducing Repeat Hospitalizations

Of course, superior discharge and care planning are keys to any initiative aimed at hospital readmission reduction. And getting these elements right will mean putting patients first. Providers need to ensure that patients understand their discharge instructions, and that they’re ready to take an active role in managing their conditions. This is especially important with chronic diseases like COPD. A study published by the Canadian Pharmacists Journal showed that 1 in 5 patients with COPD will be readmitted to hospital within 30 days of discharge.

It’s worth noting that many low-income and rural patients don’t have full access to smoking cessation support. Should hospitals in these regions be penalized when their patients are readmitted for smoking-related issues? Innovative patient-centred approaches show far more promise. In fact, one initiative aimed at improving COPD-related hospitalizations shows just how powerful patient education can be. Canada’s highly-successful INSPIRED program costs just $1000 per patient per year. In contrast, it costs about $1000 per day to hospitalize a COPD patient.

Improving patient involvement, care coordination, and provider collaboration are key to reducing readmissions. And technology has an important role to play. The right tools can connect patients with their hospital discharge teams to ensure they stay on track. They can also connect a patient’s doctor, pharmacist, care planner – everyone within their circle of care. Consider the possibilities of patient-friendly videoconferencing. And what about digital platforms that make it easy to share real-time health information, or apps that let caregivers track medication adherence? When the patient’s post-discharge journey is a real priority, the need to create well-connected circles of care becomes clear.

The Bottom Line

In the years since it was implemented, HRRP has had some success. But significant complications have also arisen. Because the legislative process can move slowly, these issues have yet to be fully resolved. In Canada, focusing on innovative prevention methods may be a better tack to take. In particular, patient-centred models and technologies can strengthen circles of care to improve hospital discharge and follow up. As we know, an empowered, well-connected patient is less likely to face an unplanned hospital readmission.

Feature image courtesy of Bradley Gordon

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