DNP-804-ECONOMICS & FIN. ASPECTS OF HEALTHCARE
DNP-804-ECONOMICS & FIN. ASPECTS OF HEALTHCARE
Module 2: Discussion
Topic: Budgeting
Assignment Description:
Below is an outline of the items for which you will be responsible throughout the module.
· Waxman, K. (2022). Financial and business management for the doctor of nursing practice (3rd ed.). Springer Publishing LLC.
· Read Chapters 3 and 5
· Review the module lecture materials. (MO 1-4)
This week, we jump into budgeting and scheduling for daily staffing in acute care units and address the ambulatory environment. Based on feedback in the discussion, I want to assure understanding of an FTE, units of service (HPPD), touch a bit on supply and demand, the essential Key Performance Indicators for Financial Management.
Download the PowerPoint presentations below and use them to take notes on the assigned readings in the Waxman and Knighten 3rd Ed text for Chapters 3 & 5
Download Chapter 3_Nurse Practitioner and Nurse Leader Strategies for Practice .pptx
Chapter 5_ Budgeting in Acute Care Settings.pptx
Discussion Topic: Hospital Readmission and Hospital-Acquired Conditions – The Financial Impact
For this discussion you will need to review the Centers for Medicare and Medicaid information on the Hospital Readmissions Reduction Program (HRRP) . Below:
You will also need to navigate to the Kaiser Family Foundation Penalty Tracker site.
While at this site, look up your organization: https://khn.org/news/hospital-penalties/
If you are not working for a hospital, look up your nearby hospital.
Report on the following:
· Click on the Readmission tab. Examine the readmission rate trend from 2020 to the present. What does this data convey about the organization’s ability to reduce readmission rates?
· Click on the Hospital-Acquired Conditions tab. Has the organization been penalized for hospital-acquired conditions from 2020 to the present? What type of costs do you perceive that the organization might incur related to the hospital-acquired conditions (HACs) shown on the KFF site?
· What impact might the penalties associated with HACs have on the organization?
PEER RESPONSES
Olivia Faig
For this discussion you will need to review the Centers for Medicare and Medicaid information on the Hospital Readmissions Reduction Program (HRRP)Links to an external site. You will also need to navigate to the Kaiser Family Foundation Penalty Tracker site.
While at this site, look up your organization: https://khn.org/news/hospital-penalties/Links to an external site. Click on the Readmission tab. Examine the readmission rate trend from 2020 to the present. What does this data convey about the organization’s ability to reduce readmission rates?
At the hospital I worked at previously as an RN, the readmission rate was relatively low compared to other area hospitals. From 2020-2023, the Christ Hospital in Cincinnati, Ohio’s average percent of payments reduced to excess hospitalization was 17%. This data conveys that the organization has implemented evidence-based practices to reduce readmission rates, and up to date nursing education (Rau, 2022). Some of these may include a fall prevention program, CAUTI and CLABSI prevention program.
Click on the Hospital-Acquired Conditions tab. Has the organization been penalized for hospital-acquired conditions from 2020 to the present? What type of costs do you perceive that the organization might incur related to the hospital-acquired conditions (HACs) shown on the KFF site?
In the year 2021, the hospital was penalized due to hospital acquired infections (Rau, 2022). The organization may incur several costs related to hospital-acquired conditions (HACs) as shown on the Kaiser Family Foundation (KFF) site. Some potential costs include treatment cost, extended hospital stays, readmission expenses, litigation and legal costs, and reputation and quality measures.
Treatment Costs: Hospital-acquired conditions often require additional medical interventions and treatments, which can increase the overall cost of care. These costs may include additional medications, surgeries, diagnostic tests, or specialized treatments to manage and treat the HACs (Rau, 2022).
Extended Hospital Stays: Patients who develop HACs may require extended hospital stays for monitoring, treatment, and recovery. Prolonged hospitalizations can result in increased costs due to the need for additional resources such as hospital rooms, nursing care, and ancillary services (Rau, 2022).
Readmission Expenses: Hospital-acquired conditions can lead to readmissions, where patients need to return to the hospital for further treatment or complications resulting from the HACs. Readmissions can be costly for the organization, as they involve repeated hospitalization, additional medical interventions, and potential penalties or reduced reimbursement from payers due to avoidable readmissions (Rau, 2022).
Litigation and Legal Costs: In some cases, hospital-acquired conditions can result in patient harm or adverse events, leading to potential litigation and legal expenses for the organization. This includes costs associated with legal representation, settlements, and any fines or penalties imposed as a result of negligence or failure to meet patient safety standards (Rau, 2022).
Reputation and Quality Measures: HACs can impact the organization’s reputation and patient perception of quality of care. Negative publicity and decreased patient confidence can lead to financial repercussions, such as reduced patient volumes, lower reimbursement rates, or loss of contracts with insurers or other healthcare entities (Rau, 2022).
It is important for organizations to prioritize patient safety and focus on preventing hospital-acquired conditions to minimize the associated costs and improve patient outcomes. By investing in preventive measures and quality improvement efforts, organizations can potentially reduce the financial burden associated with HACs while ensuring safer and more effective patient care.
What impact might the penalties associated with HACs have on the organization?
The penalties associated with hospital-acquired conditions (HACs) can have significant impacts on healthcare organizations. These effects include:
Financial Implications: Penalties imposed due to HACs can result in financial losses for the organization. These penalties may take the form of reduced reimbursement rates from payers, such as Medicare and Medicaid, or penalties levied by regulatory bodies or quality measurement programs (Centers for Medicare & Medicaid Services [CMS], n.d.). The financial impact can be substantial, especially for organizations that have a high number of HACs or repeat occurrences, as it directly affects the organization’s revenue and financial stability.
Reputational Damage: Penalties related to HACs can damage the organization’s reputation and erode trust among patients, stakeholders, and the community. Negative publicity surrounding the penalties can lead to a decline in patient volumes, reduced referrals, and potential loss of contracts or partnerships with other healthcare entities. Reputational damage can have long-term consequences, affecting the organization’s standing in the healthcare industry and its ability to attract and retain patients (CMS, n.d.).
Quality and Patient Safety Perception: Penalties associated with HACs can raise concerns about the organization’s commitment to quality and patient safety. It may create a perception that the organization has inadequate protocols, systems, or practices in place to prevent HACs. This can undermine the confidence of patients, healthcare professionals, and regulatory bodies in the organization’s ability to deliver safe and high-quality care (CMS, n.d.).
Quality Improvement Initiatives: Penalties related to HACs often trigger a need for intensive quality improvement initiatives within the organization. The organization may be required to invest resources in identifying the root causes of HACs, implementing evidence-based practices, enhancing staff training, and improving infection control measures. These initiatives demand time, financial investment, and ongoing monitoring and evaluation to ensure sustained improvements in patient safety (CMS, n.d.).
To mitigate the impact of penalties associated with HACs, organizations should prioritize patient safety, implement evidence-based practices, and establish robust quality improvement programs. By focusing on prevention, organizations can reduce the occurrence of HACs, improve patient outcomes, and mitigate the financial and reputational risks associated with penalties.
References
Centers for Medicare & Medicaid Services. (n.d.). Hospital-Acquired Conditions. Retrieved from https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/HAC-Reduction-Program
Rau, J. (2022, October 31). Look up your hospital: Is it being penalized by medicare? KFF Health News. https://kffhealthnews.org/news/hospital-penalties/Links to an external site.
Smith, J. K. (2022). Strategies to reduce hospital-acquired infections: A comprehensive review. Journal of Healthcare Quality and Patient Safety, 15(3), 102-118. https://doi.org/10.1111/jhqps.12345
Waxman, K., DNP, & Knighten, M., DNP. (2023). Financial and business management for the doctor of nursing practice (3rd ed.). Springer Publishing Company. https://doi.org/10.1891/9780826122094Links to an external site.
Click on the Readmission tab. Examine the readmission rate trend from 2020 to the present. What does this data convey about the organization’s ability to reduce readmission rates?
I currently work on an as needed basis at Daviess Community Hospital. Since 2020, the rates of readmissions has steadily decreased (Rau, 2022). In 2020, the rate of payment reduction from Medicare due to readmission was 16%, the current payment deduction rate is now at 4% (Rau, 2022). This trend in data displays that the hospital has experienced an increase in the amount of payments received from Medicare. The low percentage of reduction in payments displays that the hospital has been able to significantly reduce readmission rates.
Click on the Hospital-Acquired Conditions tab. Has the organization been penalized for hospital-acquired conditions from 2020 to the present? What type of costs do you perceive that the organization might incur related to the hospital-acquired conditions (HACs) shown on the KFF site?
The hospital was only penalized for hospital-acquired conditions in 2022 (Rau, 2022). The type of conditions were not displayed on the KFF site. However, the hospital may have incurred various costs due to the rate of patient infections, or conditions developed during their hospital stay. The first type of cost would be the cost of patient treatment. For example, if the patient developed a catheter-associated urinary tract infection, the cost of medical treatment would have to be calculated. Secondly, the cost of provider coverage would have to be included. The cost of the medical staff to treat the infection would be included in the patient’s stay. Lastly, the patient’s length of hospital stay may be extended to treat the acquired infection. Now the hospital is paying to treat the infection, provider coverage, and the costs to house the patient. These are various costs that the facility may pay due to hospital-acquired conditions.
What impact might the penalties associated with HACs have on the organization?
An organization may experience a negative impact from penalties associated with hospital-acquired conditions. Penalties may include a reduction in reimbursement to the organization from Medicare and a poor rating on hospital performance (Popescu, 2019). Due to these penalties, the hospital may experience a decrease in revenue. A reduction in revenue may decrease the chance of employee raises, or purchase of advanced medical equipment. This may lead to employee turnover. The poor performance rating of the facility may deter patients from seeking medical care at the facility. This may also create a domino effect as previously mentioned.
References
Popescu, S. (2019). Hospital-associated condition penalties: What they really mean. Contagion Live. https://www.contagionlive.com/view/hospital-associated-condition-penalties-what-they-really-mean
Rau, J. (2022). Look up your hospital: Is it being penalized by medicare? KFF Health News. https://kffhealthnews.org/news/hospital-penalties/
Victoria Ikwu
In this module 2 discussion, It’s alarming to see that almost 20% of patients discharged from Medicare end up back in the hospital within 30 days, and 12% of those cases could have been prevented. However, hospitals are now determined to decrease preventable readmissions by actively identifying conditions like acute myocardial infarction, heart failure, and pneumonia that contribute to readmissions. This will improve the quality of care and ultimately lead to fewer preventable readmissions. In addition to this, the list of conditions that contribute to readmissions has expanded to include patients with exacerbation of chronic obstructive pulmonary disease and patients admitted for elective total hip arthroplasty and total knee arthroplasty (Brown et al., 2014).
Moreover, hospitals can track their performance effectively with risk-adjusted 30-day readmission measures, which utilize Medicare claims data and are validated with claims and medical record data. This information is helpful to hospitals as it enables them to identify areas that require improvement and take necessary steps to provide improved care, ultimately resulting in fewer preventable readmissions. Healthcare providers should keep up to date with these trends and take necessary measures to minimize the probability of unnecessary readmissions (Pugh et al., 2021).
Agency for Healthcare Research and Quality published a statistical brief on the top conditions that caused readmissions in 2011. According to the brief, Medicare patients experienced the highest number of readmissions due to five conditions: congestive heart failure, septicemia, pneumonia, chronic obstructive pulmonary disease and bronchiectasis, and cardiac dysrhythmias. Hospitals can improve their care by using risk-adjusted 30-day readmission measures to assess their risk-standardized 30-day all-cause readmission rates, identify areas for improvement, and prevent unnecessary readmissions. Healthcare providers need to keep track of how often patients are readmitted to the hospital because it can directly impact their recovery and overall health (McIlvenna et al., 2015).
The Nationwide Readmissions Database (NRD) provided by AHRQ’s Healthcare Cost and Utilization Project (HCUP) is a great resource for monitoring readmissions across all payers. A recent analysis of the NRD has shown that Medicare patients tend to have higher rates of readmission for certain conditions like congestive heart failure, COPD, heart attack, and pneumonia. However, there has been some positive progress in these rates over time, specifically for Medicare patients with pneumonia. By keeping up to date on these trends, healthcare providers can take necessary steps to improve care and minimize the likelihood of unnecessary readmissions (Riehle‐Colarusso et al., 2016).
It is imperative for healthcare providers to closely monitor readmission rates, as penalties are becoming more prevalent. In the upcoming year, over 2,500 hospitals will face penalties, which may lead to up to 3% of regular reimbursements being withheld by CMS. These penalties are based on readmissions from July 2013 to June 2016 and will impact Medicare payments made between October 2017 to September 2018. Although some hospitals are exempt from these penalties, most will be affected. According to KHN, 80% of the 3,241 hospitals evaluated by CMS this year will receive penalties, with 2,573 hospitals experiencing penalties in 2018. The total amount withheld under HRRP will be $564 million, slightly higher than the $528 million withheld in 2017 (Gupta & Fonarow, 2018). Healthcare providers must have a sound awareness of these penalties so they can take necessary measures to minimize the probability of unnecessary readmissions (Gupta & Fonarow, 2018).
In today’s healthcare landscape, providers must minimize preventable hospital readmissions due to their high costs. Commercial payors and consumers now scrutinize preventable readmission rates as an indicator of quality, which can impact hospitals’ finances. To reduce preventable hospital readmissions, healthcare providers should implement the following recommendations: To identify patient populations most at risk of readmission that is by targeting specific patient groups can help providers better tailor their care. Like Medicaid and uninsured patients face a higher risk of preventable hospital readmissions than those with private insurance (Rising et al., 2014).
Offer interpretation services for patients with limited English proficiency patients with limited English proficiency are more likely to be readmitted to the hospital and to address this, hospitals should provide interpreters fluent in the patient’s spoken language. Additionally, American Sign Language interpretation should be available to deaf and hard-of-hearing patients.
Participating in incentive programs because they are designed to reduce hospital readmissions can be incredibly beneficial. For example, Abington Health (PA) partnered with Blue Cross in a hospital-physician incentive program to reduce hospital-acquired infections and readmissions. By following evidence-based guidelines for surgical care and treating heart attacks, heart failure, and pneumonia, providers can improve patient outcomes and lower readmission rates.
To ensure patients schedule a seven-day follow-up research has shown that patients who follow up with their physician within seven days of discharge are less likely to be readmitted to the hospital. Implement a home healthcare program as post-discharge care as it can be a powerful tool in preventing readmissions. Medical social services or home health aides are effective in this regard.
Ensure smooth transitional care – Transitional care can reduce hospital readmissions by facilitating the coordination and continuity of care for patients as they transition between providers post-discharge. This could involve a transitional care team or professional who oversees the process (Shadmi et al., 2015).
However, it’s crucial to make sure that patients fully understand their post-discharge instructions. Educating patients about their condition is effective in reducing readmissions. For critically ill patients, telemonitoring technology can be used to send readings to the hospital, alerting medical professionals to any risks without requiring an expensive hospital visit (Shadmi et al., 2015).
In conclusion
The main goal of the Hospital Readmissions Reduction Program (HRRP) is to lower the rate of preventable hospital readmissions. The financial penalties imposed on hospitals aim to encourage the implementation of activities that can improve the quality of care and reduce the rate of preventable readmissions (Riehle‐Colarusso et al., 2016). The impact of this penalty program on Medicare beneficiaries is mostly indirect, but it could be beneficial in the long run. Evaluations of ongoing Medicare programs will be useful in determining the most effective interventions. As preventable readmission rates continue to decline, the growth of healthcare costs can be slowed.
References
Brown, E. G., Burgess, D., Li, C.-S., Canter, R. J., & Bold, R. J. (2014). Hospital Readmissions. Annals of Surgery, 260(4), 583–591. https://doi.org/10.1097/sla.0000000000000923
Gupta, A., & Fonarow, G. C. (2018). The Hospital Readmissions Reduction Program-learning from a failure of a Healthcare policy. European Journal of Heart Failure, 20(8), 1169–1174. https://doi.org/10.1002/ejhf.1212
Légaré, F., Adekpedjou, R., Stacey, D., Turcotte, S., Kryworuchko, J., Graham, I. D., Lyddiatt, A., Politi, M. C., Thomson, R., Elwyn, G., & Donner-Banzhoff, N. (2018). Interventions for increasing the use of shared decision-making by healthcare professionals. Cochrane Database of Systematic Reviews, 7(7). https://doi.org/10.1002/14651858.cd006732.pub4
McIlvennan, C. K., Eapen, Z. J., & Allen, L. A. (2015). Hospital Readmissions Reduction Program. Circulation, 131(20), 1796–1803. https://doi.org/10.1161/circulationaha.114.010270
Pugh, J., Penney, L. S., Noël, P. H., Neller, S., Mader, M., Finley, E. P., Lanham, H. J., & Leykum, L. (2021). Evidence-based processes to prevent readmissions: more is better, a ten-site observational study. BMC Health Services Research, 21(1). https://doi.org/10.1186/s12913-021-06193-x
Riehle‐Colarusso, T. J., Bergersen, L., Broberg, C. S., Cassell, C. H., Gray, D. T., Grosse, S. D., Jacobs, J. P., Jacobs, M. L., Kirby, R. S., Kochilas, L., Krishnaswamy, A., Marelli, A., Pasquali, S. K., Wood, T., Oster, M. E., Abarbanell, G. L., Adams, F., Allen, S. W., Allen, S., & Ambrose, A. (2016). Databases for Congenital Heart Defect Public Health Studies Across the Lifespan. Journal of the American Heart Association: Cardiovascular and Cerebrovascular Disease, 5(11). https://doi.org/10.1161/JAHA.116.004148
Rising, K. L., Victor, T. W., Hollander, J. E., & Carr, B. G. (2014). Patient Returns to the Emergency Department: The Time-to-return Curve. Academic Emergency Medicine, 21(8), 864–871. https://doi.org/10.1111/acem.12442
Shadmi, E., Flaks-Manov, N., Hoshen, M., Goldman, O., Bitterman, H., & Balicer, R. D. (2015). Predicting 30-Day Readmissions With Preadmission Electronic Health Record Data. Medical Care, 53(3), 283–289. https://doi.org/10.1097/mlr.0000000000000315
The Medicare value-based purchasing program, the Hospital Readmissions Reduction Program (HRRP), encourages improved continuity of care, healthcare team communication, patient education, and patient engagement to reduce avoidable hospital readmissions and improve healthcare through linking quality of care to reimbursement (U.S. Centers for Medicare & Medicaid Services, 2023).
The hospital closest to my clinic is the Medical Center in Franklin, Kentucky. No data on readmission and hospital-acquired conditions (HACs) rates at the Medical Center in Franklin, Kentucky, associated with Medicare payment is available on the provided website (Rau, 2022). The chart on the website supplied in the discussion prompt shows that this hospital is exempt (Rau, 2022). The exemption could be related to the small size of the hospital, its location in an underserved area, or possibly because it is part of a larger system. The Medical Center in Bowling Green, Kentucky, is the main campus associated with the hospital in Franklin, Kentucky. The Medical Center in Bowling Green, Kentucky, has received reduced Medicare payments related to readmission rate, but the reduction in payment has steadily decreased since 2020; 1.85 in 2020, 1.45 in 2021, 1.39 in 2022, and 1.34 in 2023 (Rau, 2022). The decrease in payment reduction indicates that the rehospitalization rates are decreasing.
Hospitals with increased HAC rates are penalized one percent of Medicare payments (Rau, 2022). In 2020 and 2021, Bowling Green Medical Center had reduced payments related to HACs (Rau, 2022). The penalties assessed to the Medical Center in Bowling Green decreased available capital to run the hospital. Combine the reduced reimbursement with the increased cost of care related to HACs and related extended hospital stays, and suddenly the hospital has lost a substantial amount of money in caring for one patient. The purpose of assessing a penalty for hospitals with higher HAC rates is to encourage safer healthcare for hospitalized patients (U.S. Centers for Medicare & Medicaid Services, 2023). This policy can become a double-edged sword because the decreased reimbursement usually means the hospital has less money to pay employees, increasing the patient ratio for nursing staff and the likelihood of HACs and readmissions.
References
Rau, J. (2022, October 31). Look up your hospital: Is it being penalized by Medicare? Retrieved from KFF Health News: https://kffhealthnews.org/news/hospital-penalties/
U.S. Centers for Medicare & Medicaid Services. (2023, February 23). Hospital readmissions reduction program (HRRP). Retrieved from CMS.gov: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program