Medicare Could Lower Long-Term Costs, Avoid Physician Fee Cuts By Reducing Hospital Readmissions, Opinion Piece Says

Reducing hospital readmissions by Medicare beneficiaries could play a
large role in reducing program spending enough to avoid cutting
physician fees, Robert Pozen, a trustee of the Commonwealth Fund, and Cathy Schoen, senior vice president of the fund, write in a Boston Globe
opinion piece. According to Pozen and Schoen, Medicare must reduce
expenses by $20 billion annually over a decade beginning in 2010 to
avoid reducing fees to physicians.

They write that "there is a
straightforward way to pay for half of this fix" through reducing
hospital readmissions. The authors note that a Medicare Payment Advisory Commission
study found that 75% of all 30-day hospital readmissions of Medicare
patients in 2005 were potentially preventable -- or 13% of total
admissions. If these readmissions were eliminated, Medicare could save
$12 billion annually, or more than half of its unfunded liability,
according to the authors.

According to Pozen and Schoen, in
order to achieve these savings, Congress should address three
objectives: decreasing complications during hospital stays, improving
patient communication during the discharge process and tracking
patients after discharge. However, for these measures to work,
"Medicare needs to create the right incentives" because hospitals
currently receive higher payments for patients being treated twice,
according to the authors. The authors write that Congress should
require readmission rates to be public. They continue that hospitals
whose readmission rates are above the national average should receive
lower reimbursements for a beneficiary's second stay, while hospitals
who have rates lower than the national average should receive higher
reimbursements for a beneficiary's first hospital stay.