HEALTH PLANS that are hoping to reduce inpatient volumes would be best served by reviewing their reimbursement and provider
incentives for preventive care, say experts.
Change in Inpatient discharges by clinical condition FY 2004-FY 2007
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"For services with growing demand, executives may want to evaluate their reimbursement structure and incentives regarding
the site of service delivery," says David Schutt, MD, associate medical director for the healthcare business of Thomson Reuters.
"There may be opportunities to move patients to high-volume and/or lower-cost providers."
Obviously, a hospital inpatient admission typically represents the most expensive form of service or treatment, says Marc
Mertz, senior manager with The Camden Group, national healthcare advisory firm based in Los Angeles.
"Therefore it is in a health plan's best interest, when clinically appropriate, to work with providers and with patients to
deliver services on an outpatient basis," Mertz says. "To some degree, plans can adjust contracted reimbursement rates to
balance inpatient and outpatient reimbursement and potentially create incentives to provide more services on an outpatient
basis. But this assumes that the physicians or patients have a choice regarding the site of service. Typically, this is not
the case as site-of-service decisions are usually based on the patient's condition or the nature of the service. Few patients
choose to be admitted—or will accept being admitted—for services that could have been performed on an outpatient basis." RENAL FAILURE GROWS
According to Thomson Reuters, the fastest-growing clinical condition is renal failure, specifically acute renal failure. The
reasons for this growth are not fully known, but may be due to the increased rate of diabetes and hypertension, expanded criteria
for diagnosing renal failure, and coding changes.
Increasing reimbursement rates for relatively low-cost services such as preventive exams and screenings can reduce admission
rates, Mertz says.
"For example, renal failure discharges, which according to [Thomson Reuters] had the highest growth rate, can be reduced by
encouraging patients to have annual exams and blood work," he says. "One of the best ways to accomplish this is to provide
quality incentives to primary care physicians. The alignment of patient, provider, and payer incentives can, in this case,
result in higher quality care and less expense to the healthcare industry."
Another finding from Thomson Reuters shows the demand for major cardiovascular care continues to decline.
"Our prior research has shown that the prevalence of heart disease in hospital patients has increased—as expected—with the
aging population," says Dr. Schutt. "However, heart disease is increasingly less likely to be the primary reason for hospitalization,
most likely due to long-term population treatment for risk factors such as elevated cholesterol and high blood pressure."
Executives should drill into their own data to see whether, and to what degree, these national trends are occurring in their
service areas.
"There is great variation around these types of indicators, and the national average may not reflect what is happening in
any given locality," Dr. Schutt says. "Managed care executives should make decisions based on a sound understanding of the
local picture."
Mertz agrees that healthcare trends and utilization rates can be highly localized depending on variations in patient populations,
physicians, and the availability of services and facilities.
"It is imperative that plans understand what their service area data indicates rather than what national trends suggest,"
he says. "The accessibility of pertinent and accurate data will continue to be key to organizations' success."
—Tracey Walker
Commentary is independent of source data
