Hospitals address slashed payments, technology investments and rehospitalizations

Boston Herald: Massachusetts hospital officials say that reduced federal and state payments may destabilize health care delivery. The state's combined Medicaid and CHIP program, known as MassHealth, plans to cut hospital reimbursements "by $75 million in its main contract between hospitals and MassHealth, according to the Massachusetts Hospital Association, which cited 'discussions' with the state in outlining the proposed cut to its members over the weekend. The association said pay-for-performance programs would continue in 2011 but that instead of additional funding being paid to hospitals, MassHealth would withhold 2 percent of all hospital inpatient and outpatient payments and hospitals would then need to earn the payments back. Executives say the approach likely means 2011 rates 'would likely be paid sometime in September 2012.' Also, a new federal Medicare rule has cut payments to hospitals by $3.7 billion nationwide, with a $94 million reduction for Bay State hospitals this fiscal year, according to the association" (Norton, 8/15).

Detroit Free Press: "All over the state, hospitals and doctor networks are investing millions in technology, a push also being made by the federal government. Patients at some of the state's largest health systems over the next few years, for example, will have hospital rooms wired into a computer system that lets them see their vital signs, medicines and the name and photograph of the hospital staffer who enters their room. All 191 rooms at Henry Ford West Bloomfield Hospital are now equipped with Smart Room technology. The Detroit Medical Center plans to add it in the next few years on its Harper and Hutzel hospitals' medical and surgical floors. The DMC has already spent $50 million in the last few years to upgrade its electronic medical records system" (Anstett, 8/16).

Modern Healthcare: "While preventable rehospitalizations have been a long-standing problem, providers are now scrambling to find ways to effectively address them, particularly after the passage of the Patient Protection and Affordable Care Act of 2010, which includes a payment penalty in two years for hospitals with the highest rates of readmissions. The startling statistics related to rehospitalizations are nothing new: one out of every five Medicare patients discharged from the hospital is readmitted within 30 days, and nearly 75% of those readmissions are preventable. … The prospect of reduced payments, which are set to take effect in October 2012, has prompted increasing numbers of hospitals and payers to turn to solutions that incorporate the use of one person—a coach or advocate—who establishes personal relationships, promotes self-care and guides patients through the thorny period following discharge from a hospital" (McKinney, 8/16).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.