As federal healthcare reform legislative activity moves into a white heat of discussions and negotiations on Capitol Hill, one thing is certain: whatever plan ultimately passes Congress, if one does, there will almost certainly be incentives in the reform legislation to try to bend the healthcare cost trajectory of the Medicare program, which, without major intervention, is headed in a very tough direction for the country.
And one focus within that area will almost certainly be the chronically ill elderly, whose healthcare expenses account for as much as 75 percent of the nation’s annual Medicare costs. The term for these individuals that physicians have long used is “frequent flyers”—a term we all are familiar with from the airline/travel industry, though here applied rather ironically to healthcare delivery and financing.
The reality is stark: as the Washington Post reported at the end of last month, “Readmission costs [for this population] are staggering. One of five Medicare hospital patients returns to the hospital within 30 days—at a cost to Medicare of $12 billion to $15 billion a year—and by 90 days, the rate rises to one of three, according to an analysis of 2007 data by Stephen Jencks,” an article in the June 30 Post notes. “Within a year, two out of three are back in the hospital—or dead. Jencks consults on this issue for the independent Massachusetts-based Institute for Healthcare Improvement,” the newspaper’s article adds.
Of course, some in healthcare have long known about—and have been trying to do something about—the “frequent flyer” problem. Disease management and care management programs have been around for decades now, and have often made great progress in averting readmissions and improving the health status of high-utilizing seniors. But the reimbursement system has consistently frustrated broader progress.
Now, it appears that healthcare reform legislation might put into place a number of possible reimbursement innovations, including such concepts as accountable care groups, and possibly even medical home models, that might be piloted very soon, and that could ultimately be incorporated in core Medicare reimbursement systems.
Interest in such innovations is definitely bipartisan. But for any such experiments or innovations to succeed, they will need very intensive and extensive data and information system support. Smart CIOs and smart hospital and health system organizations are already laying the foundations for the information systems that can make innovative reimbursement schemas work. But it will take a lot of planning, development, and strong implementations in order to truly facilitate new payment arrangements.
CIOs whose organizations have already been participating in private-sector and Medicare pilot projects could have quite a leg up when it comes to being prepared to support emerging new reimbursement systems. In the process, they could become real leaders for our healthcare system, as our country attempts to seriously address a problem that continues to call out for leadership and innovation, both for the sake of cost savings and for the sake of the patients whose “frequent flying” is a sign of failure for all the stakeholders in the healthcare system.