June 14, 2012

Study: Reducing Potentially Avoidable Hospitalizations for Patients Receiving Medicare and Medicaid Could Save Millions

Highlights

  • Dual-eligible Medicare-Medicaid patients patients are often hospitalized for conditions that might be prevented or effectively treated outside of the hospital
  • Providing better care could reduce hospitalization rates, saving taxpayers between $625 million and $1.9 billion per year
  • The study was published in the May issue of the Journal of the American Geriatrics Society

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Edith Walsh
Edith Walsh

RESEARCH TRIANGLE PARK, N.C. — Providing better care for dual-eligible Medicare-Medicaid patients could significantly reduce hospitalization rates for this population, saving taxpayers between $625 million and $1.9 billion per year, according to a new study by researchers at RTI International and Florida Atlantic University.

The study looked at patients who are eligible for both Medicare and Medicaid, a population that is commonly hospitalized for conditions that might have been prevented or effectively treated outside of the hospital setting.

Dual-eligible patients tend to have multiple chronic conditions and are frequently hospitalized, even when they are receiving Medicare skilled nursing facility care, Medicare nursing home care or Medicaid home and community-based long-term care services.

A study published in the May issue of the Journal of the American Geriatrics Society analyzes the frequency and cost of potentially avoidable hospitalizations for dual-eligible patients receiving long-term or post-acute care services. The study, which was funded by the Centers for Medicare and Medicaid Services, could help inform the development of health policies and better care programs and outcomes for this population.

"This population is of increasing interest because of their clinical complexity and high costs," said Edith Walsh, Ph.D., a senior researcher at RTI and lead author of the study. "Knowing the costs associated with potentially avoidable hospitalizations may motivate quality improvement and stimulate policy changes, including strategies to improve coordination and integration of Medicare and Medicaid benefits. The Centers for Medicare and Medicaid Services has several initiatives designed to address this problem."

The findings are based on a retrospective study of hospitalizations of patients in Medicare and Medicaid-covered nursing facilities and Medicaid home and community-based services waiver programs in 2005, the most recent data available.

The study found that more than one-third of the patients in those settings were hospitalized at least once, totaling 958,837 hospitalizations, and many patients were hospitalized more than once. After identifying the conditions that might be effectively managed without hospitalization, the researchers determined that up to 39 percent of the hospital visits (382,846 admissions) might have been avoided with more effective care.

The estimated total costs of these potentially avoidable hospitalizations were $3 billion for Medicare and $463 million for Medicaid. The authors estimate that reducing the number of hospitalizations by 20 to 60 percent could prevent between 77,000 and 260,000 hospitalizations and save between $625 and $1.9 billion in costs.

Reducing potentially avoidable hospitalizations could also decrease incidences of patient complications that may occur as a result of a hospital stay, such as delirium, decreased function, injurious falls and hospital-acquired infections.

"The volume and costs related to these hospitalizations are substantial. Even a modest reduction would result in substantial savings in economic and human costs," Walsh said.

The authors identified five conditions – pneumonia, congestive heart failure, urinary tract infection, dehydration and chronic obstructive pulmonary disease or asthma – that were responsible for more than three-quarters of the potentially avoidable hospitalizations.

Individuals in Medicaid home and community-based services waiver programs had higher rates of total hospitalizations than Medicaid nursing home patients, which reflects the complex medical, functional and supportive service needs of this community-dwelling, long-term care population. The study also found that hospitalization rates varied widely from state to state. African Americans were hospitalized more frequently and at a higher cost than white patients from all settings, and Hispanics were hospitalized more frequently from nursing facility stays and less frequently from the community.

"The findings suggest that there is room for improvement in reducing potentially avoidable hospitalizations. However, necessary interventions, such as improving quality of care in long-term care settings and expanding home and community-based service programs, will require additional investments by state Medicaid programs to yield savings or Medicare policies that provide an incentive to reduce hospitalizations," Walsh said.

Other authors of the article included Joshua M. Wiener, Ph.D., Susan Haber, Sc.D., and Arnold Bragg, Ph.D., of RTI International; Marc Freiman, Ph.D., (formerly of RTI International); and Joseph Ouslander, M.D., of Florida Atlantic University.