Typical Hospital Wastes Up To $3.8 Million A Year On Readmissions: Study

Hospitals that keep you from having to return for more treatments can cut health care costs for you and themselves, according to a new study.

Having to return to the hospital for another round of treatments for the same medical condition isn't just emotionally draining, potentially dangerous and tough on a patient's wallet. It also costs hospitals a ton of money, according to a report issued today.

A typical hospital with 200 to 300 beds wastes up to $3.8 million a year, or 9.6 percent of its total budget, on readmissions of patients who shouldn't have had to come back, says Premier, a health care company that advises hospitals on improving efficiency and safety. The company analyzed the records of 5.8 million incidents in which a patient went back to a hospital to be re-treated and found they added $8.7 billion a year, or 15.7 percent, to the cost of caring for those people.

Cutting back on these readmissions would be good news for patients. Even if the hospital has to eat the costs of additional treatments, patients are still subject to the risks of the procedures they undergo and the normal danger of contracting an infection while in the hospital. Patients being treated for heart attacks, respiratory problems like pneumonia and major joint problems are the most likely to wind up back in the hospital, according to Premier.

Wasteful spending in the U.S. health care system has been estimated to be as high as $850 billion each year, according to a 2009 Thomson Reuters report. Overall health care spending rose by a factor of 10 between 1980 and 2010, when it reached $2.6 trillion.

Hospitals are ground zero for health care cost-containment efforts because they are the biggest recipients of America's health care spending, having taken in $814 billion in 2010, according to a federal government report. Rising costs and shrinking payments from government programs like Medicare and Medicaid and from private insurance companies have hospitals looking everywhere for ways to streamline their operations.

The health care reform law enacted two years ago expands on efforts begun three years ago to link how much Medicare pays hospitals to how well they reduce medical errors, readmissions, and other inefficiencies. Starting next year, hospitals will see their Medicare payments docked by 1 percent if they don't cut back on these readmissions. The penalty increases to 3 percent in 2015.

Premier's message to hospitals feeling squeezed: The money you need to save is already in the system. The company has identified 15 steps hospitals can take to improve the care they provide while also saving money, such as making sure patients are treated right the first time and don't need to be "readmitted" for more care. By analyzing information culled from its hospital partners, Premier recommends other targets for savings, such as performing fewer blood transfusions and limiting costly tests.

Major physician groups also recently rolled out an initiative to reduce unnecessary medical tests. Combined with efforts such as those promoted by Premier, these ventures underscore how private sector health care entities are accelerating cost-containment programs with a push by the health care reform law.

CORRECTION: An earlier version of this story stated that Premier is a nonprofit company. Premier is a for-profit company that works with nonprofit hospitals.

Comments

[FREEAMERICA2]

06:08 AM on 04/13/2012

Health care should NOT be privatized . that is all. Need to take the profit motive out of health care.

[Janine547]

05:10 PM on 04/11/2012

NEWSFLASH !!! Hospitals waste $3.8 MILLION per year while GOVERNMENT waste TRILLIONS per year !

[JustinP213]

04:31 PM on 04/11/2012

Hospitals waste money? This can't be.

[ICUrnJen]

04:12 PM on 04/11/2012

Hello All,
ICU nurse here. Nothing is perfect and nothing will be. Health care bills are expensive because we are paying for those who cannot or do not pay their bills. Yes, you go to the ER and are seen for 15 minutes and have a CAT scan and it is $5000. I agree that is too high. You are helping to pay for all the others who cannot pay their bills. As far as the readmit within a certain time period. Sometimes it is justified and sometimes it isn't. It seems like it should be related to the original DX, but it dosen't matter. Patient comes back in and the hospital won't get paid. For CHF patients we send home a scale and make follow up calls to help keep them from readmit. If they choose not to follow advice or take their meds you and I get to pay. That is the way it is and part of the reason healthcare costs as much as it does. As our population ages this problem will only get worse. Certain conditions contracted in the hospital will not be covered. If you get a UTI, VAP or skin ulcer your treatment will not be covered. The hospital eats the cost of treating those conditions and you can bet some of those costs are passed along. At some point the way healthcare works will need to be addressed because the way it works now will not hold up in the future.

[rda1911a1]

02:12 PM on 04/11/2012

If we did not have stupid federal regulations and faceless beureacrats making medical decisions based on check the box forms we might not have this situation. I would be willing to bet half of all tests conducted at my work are just to keep some doctor from being sued

[Anne Rutherford]

01:06 PM on 04/11/2012

Part of the cause for early discharge is the fact that insurance companies don't want to pay for an extra day's stay. My husband was admitted for 8 days with UTI that didn't respond to a normal course of antibiotics. It took IV antibiotics and he was discharged despite some questionable indicators that the infection wasn't completely under control. Again, he was given oral antibiotics on discharge. Two weeks later he was readmitted with the original infection and one more added to the mix. He was in for nearly 10 days, and they wanted him to come home with a PIC line and I was to administer all his drugs at home. I fought that, he was discharged to a step-down unit until all the drugs were administered. (Hard to keep a sterile field with dogs and cats at home). If there wasn't a rush to discharge, the cost would have been less. This isn't the first time it has happened. He has MS and is subject to UTI's despite having a permanent catheter. There are ways to contain cost - early discharge isn't one of them.

[bryan west]

10:49 AM on 04/11/2012

Wow, I'm amazed this is even considered news considering how subjective it is.

What the article fails to point out is that Hospitals aren't 'wasting' this money. Rather, they are getting 'screwed' out of the money thanks to the government.

Here are several scenario's that happen all the time that fall under the 30 day readmission rule.

-A patient comes into the hospital for pneumonia. The doctor notices that they may be experiencing heart problems. The pneumonia is taken care of and the patient is discharged and told that they need to see Dr. X who is a cardiologist as soon as they can. The patient is old and stubborn, and they don't want to pay the small fee for another office visit and ignore their doctors orders. 2 weeks later the patient comes to the ED experiencing atrial fibrillation, and is admitted. The result is that the hospital will not be reimbursed for the second admission even though they did everything within their power to ensure that the patient was healthy and didn't require another admission.

-Scenario two-A patient was seen at hospital A, they were admitted and treated, but perhaps their doctor didn't do such a great job . The patient is discharged, but a few weeks later their symptoms begin to return. They decide to go to hospital B, since they didn't like the treatment they received at hospital A. Now Hospital B will not be reimbursed since it's the patients second admission within 30 days.

[SBR Health]

09:52 AM on 04/11/2012

I would point out the difference between "unnecessary" and "preventable" readmission. A lot is being done to check in frequently with patients once they are discharged, as well as monitor them if they have complex issues. This will allow for early intervention that can prevent readmission, and will result in real and significant savings to the system. Inexpensive video communication systems, home telemetry, home visits, and even simple phone calls can all increase the sample frequency on discharged patients that can help to provide better post discharge monitoring.

[Anne Rutherford]

01:10 PM on 04/11/2012

This may be true, but that must be in largely urban areas. For those who live in a rural environment, we are plagued by doctor shortages, a lack of inexpensive, but "sophisticated" suggestions you make. I quite agree that better monitoring would help. I find that increasingly, families are expected to administer PIC lines, and IV drugs - often with little to no training - and a call me if you have a question. I've called - and these home health providers often don't get back to you when you need them. You become a healthcare semi-professional with OJT if you want your loved one to survive.

[SBR Health]

02:11 PM on 04/11/2012

Well, as someone who just underwent a recent major surgery and got pushed out the door with no "care instructions" I (and my wife especially) would definitely agree with you on that last point!!

[Tiggy]

11:05 PM on 04/10/2012

Hospice just had its funds slashed by the Government. How does Hospice help? They are non profit! They rely on donations, volunteers and funding. The cost of staying in a hospice comforter is half the cost of staying in a hospital. So by losing your local hospice, more will go to the hospitals and cost far more in tax dollars! Only to the government is this sound fiscal policy.

[schatsie]

11:12 PM on 04/10/2012

If you are LUCKY, you have a non-profit, really non-profit hospice in your area...But it does cost something.... I just keep thinking they are barking up the wrong tree. I believe that in Europe the average LOS is twice what it is here with the same rate of infection...but fewer readmissions and less stress for the family...Of course there is a reason we do not have this data and it is because the Wall Street investors in healthcare do not want to have to compare this system to the single payer systems......

[Tiggy]

11:44 PM on 04/10/2012

Agreed! They would rather flood us with fear than an ounce of truth and fact! I was shocked to see that ford has a car tha gets over 50 MPG that is sold in Europe but not here! As to healthcare, we are lucky to have our local hospice comforter and I see the work they do. I have the greatest respect for them and their staff. I have met a mother who said goodbye to her son, a son who told his father goodbye and a wife try to hold it together as her husband passed away. They all praised the staff at Hospice and the facilty for helping them during that difficult time. No hospital could have provided that care and privacy. I encourage all to visit their local Hospice Comforter if they have one to see the service they provide and to see how the community can help support them

[yogajan]

10:56 PM on 04/10/2012

The government would save billions of dollars and the public would benefit from a single payer universal health care program. Anyone who wouldn't like to be a part of it, could opt-out and pay out of pocket like is done now for cosmetic surgery.

[AgathaX]

11:07 PM on 04/10/2012

No opting out without private insurance or significant assets.

[schatsie]

11:13 PM on 04/10/2012

and that is also what they do in the other countries with single payer, they can pay supplemental health insurance for that coverage......also, they do not have the deductibles and copays and coinsurance that we have.....

[somewhatodd]

09:30 PM on 04/10/2012

its only wasteful if a republican doesnt end up with the money.

[madmomrn1]

09:22 PM on 04/10/2012

This is a complex issue and not as simple as this article makes it seem. There are things hospitals are doing to prevent re-admissions all the time. Improve patient teaching, instituting "best practice" medical initiatives that have been shown to improve out comes are just 2 of items that are done. However, one concerning trend I have seen is with some elderly or chronically ill people is poor reality perception about what they can and cannot do any more....people insist on going home only to return 2-3 days later because they cannot care for themselves. They are not mentally incompetent and still have the right to control their lives. It is often difficult for family members to deal with as well. Frank discussions on death and dying must become a more regular part of health care.

[rtx47]

10:30 PM on 04/10/2012

A hospital is not a place for:

"elderly or chronically ill people is poor reality perception about what they can and cannot do any more....people insist on going home only to return 2-3 days later because they cannot care for themselves."

The above person needs a family. If the family cannot care for the person, the govt (likely Medicare) should pay for nursing home care and bill the family; taking them to family court if necessary. Let an independent judge decide whether the family or the taxpayer should care for the person.

[yogajan]

10:44 PM on 04/10/2012

Not everyone has a family. You are very black and white in your analysis. I know people who are totally alone; no family, no friends, no caregivers and by the way, very little money.

[Anne Rutherford]

01:13 PM on 04/11/2012

As someone caring for a husband who falls into that category and works full-time to keep him insured, it isn't easy to get providers to talk to you. I have arm wrestled with nursing staff, PT providers, and physicians to talk to me. I had a bill contested for him based on the fact "he said he felt better". It took 10 months to resolve that one - and appeal to the insurance commission after two denials by the provider - based on what he said. I am working to keep him out of a nursing home and at home and have people who live with me for very reduced rent to accomplish that.

[Tiggy]

11:23 PM on 04/10/2012

With recent cuts to Hospice Comforter you may be seeing a lot more of the elderly

[jab2165]

08:53 PM on 04/10/2012

We live in a dying world.

[simpleperson]

01:42 PM on 04/11/2012

..always have...always will.

[fogelbaby]

08:07 PM on 04/10/2012

This is a more complicated issue than the article makes it out to be. Readmissions are a source of health care costs, but to say that they are "uneccessary" or "preventable" or "a waste" is to misunderstand how health care works.

Most readmissions are not preventable events. For example -

1) a patient is admitted with a bowel obstruction. They are managed conservatively with bowel rest. Four days later they are improved and they go home. 7 days later they reobstruct and return to the hospital, which is logged as a readmission. This was unpreventable not a waste.

2) a patient has surgery, and two days after surgery are doing fine and go home. Five days later they are admitted for management of a wound infection. This is a readmission, and assuming that proper surgical procedure was followed, was also unpreventable. In this situation, if they had stayed in the hospital for five days and the wound infection had been diagnosed during that admission, there would be no 'readmission' counted against the hospital, despite the fact that the patient was managed inappropriately.

This article is one of countless articles I see that complains about the cost of healthcare without almost no insight into how medicine is actually practiced and delivered. There are all kinds of problems, but "unnecessary readmissions" isn't one of them.

[schatsie]

11:18 PM on 04/10/2012

I agree with you entirely and your examples are reasonable....Although I do believe that patients do need more time in the hospital.... Question is whether or not the level of care justifies the egregious charges.....

[dcol]

07:57 PM on 04/10/2012

It is a known fact that the high cost of health care is due to overcharging, over testing, over admissions, and over prescribing. We need to start with cracking down on doctors, clinics, pharmaceutical companies, and hospitals if we want to have a stable healthcare system that can work for everyone.

[schatsie]

11:22 PM on 04/10/2012

The only way to corral all the parties is to institute a single payer system.....We have had "paradigm" shifts over the last 30 years that were supposed to reduce costs and what have we accomplished? We see our doctors 1/2 the time that they do in other developed countries and I dare say for breifer visits and we have fewer hospital admissions and stay less time...... and what do we have - a system that forces 500,000 people into bankrupcy every year for health care and 50 million with no insurance who are excluded from the system....

[Tiggy]

11:34 PM on 04/10/2012

Overcharging is an understatement. A recent visit to the ER after falling from a ladder and sustaining a head injury? 36K. The service? A doc to order ct scans and xrays, no mri's and the ambulance started the IV. My husband cleaned my wounds once he was allowed to see me which was five hours after I arrived. My hand which was so swollen that I could not move it and bloody was missed during the xrays! The necessary mri's were ordered by neurologist and neurosurgeon upon follow. This was not a case where you get what you pay for. The EMT's were awesome from what I have been told...I have no memory of them but my neighbor who was with me until they arrived said they were great. BTW their costs? Less than 1 K.