6
An Effectiveness and Cost-Benefit Analysis of a Hospital-Based Discharge Transition Program for Elderly Medicare Recipients Shadi S. Saleh, PhD, MPH, * Chris Freire, LMSW, Gwendolyn Morris-Dickinson, RPA-C, MS, and Trip Shannon, MS OBJECTIVE: To investigate the business case of postdis- charge care transition (PDCT) among Medicare benefi- ciaries by conducting a cost-benefit analysis. DESIGN: Randomized controlled trial. SETTING: A general hospital in upstate New York State. PARTICIPANTS: Elderly Medicare beneficiaries being treated from October 2008 through December 2009 were randomly selected to receive services as part of a compre- hensive PDCT program (intervention173 patients) or regular discharge process (control160 patients) and fol- lowed for 12 months. INTERVENTION: The intervention comprised five activi- ties: development of a patient-centered health record, a structured discharge preparation checklist of critical activi- ties, delivery of patient self-activation and management sessions, follow-up appointments, and coordination of data flow. MEASUREMENTS: Cost-benefit ratio of the PDCT pro- gram; self-management skills and abilities. RESULTS: The 1-year readmission analysis revealed that control participants were more likely to be readmitted than intervention participants (58.2% vs 48.2%; P = .08); with most of that difference observed in the 91 to 365 days after discharge. Findings from the cost-benefit analysis revealed a cost-benefit ratio of 1.09, which indi- cates that, for every $1 spent on the program, a saving of $1.09 was realized. In addition, participating in a care transition program significantly enhanced self-management skills and abilities. CONCLUSION: Postdischarge care transition programs have a dual benefit of enhancing elderly adults’ self-management skills and abilities and producing cost savings. This study builds a case for the inclusion of PDCT programs as a reimbursable service in benefit packages. J Am Geriatr Soc 60:1051–1056, 2012. Key words: postdischarge care transition; elderly; medi- care; cost-benefit T he hospitalization postdischarge period is critical, 1 especially for individuals with complex care needs such as elderly adults. This population is particularly vulnerable to experiencing fragmented care during transitions between the various care contexts. 2 As such, understanding challenges and adapting strategies to relieve some of the complexities usually present after discharge can affect outcomes of care. One such strategy is employing care transition programs, which are a set of actions intended to guarantee coordi- nation among healthcare practitioners and continuity of medical care as patients are transferred between locations or between levels of care at the same location. 35 Few studies have examined the clinical and resource utilization effect of postdischarge care transition (PDCT) interventions. Most of these have reported favorable results in terms of outcomes of care and reduced readmis- sions. 4,68 Nevertheless, despite the encouraging potential effect of transition care intervention in reducing resource use and assisting older adults and their family members in making smoother transitions, system barriers exist that prevent its widespread adoption. A number of these barriers are related to financial factors. An example cited frequently is the structure of the reimbursement system, which has a built-in inherent incentive for readmissions (e.g., readmissions beyond a time window from an index admission are associated with separate reimbursement) that is being partly addressed through recent legislation that qualifies payment for certain readmissions. Another barrier is the lack of financial recognition and From the * Department of Health Management and Policy, Faculty of Health Sciences, American University of Beirut, Beirut, Lebanon; Glens Falls Hospital, Glens Falls, NY; and Hudson Headwaters Health Network, Glens Falls, NY. The study was funded by a grant from the New York State Health Foundation. Address correspondence to Shadi S. Saleh, Department of Health Management and Policy, Faculty of Health Sciences, American University of Beirut, Van Dyck, Room IIIC, P.O. Box 11-0236, Raid El Sohl, Beirut 1107 2020, Beirut, Lebanon. E-mail: [email protected] DOI: 10.1111/j.1532-5415.2012.03992.x JAGS 60:1051–1056, 2012 © 2012, Copyright the Authors Journal compilation © 2012, The American Geriatrics Society 0002-8614/12/$15.00

An Effectiveness and Cost-Benefit Analysis of a Hospital-Based Discharge Transition Program for Elderly Medicare Recipients

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An Effectiveness and Cost-Benefit Analysis of a Hospital-BasedDischarge Transition Program for Elderly Medicare Recipients

Shadi S. Saleh, PhD, MPH,* Chris Freire, LMSW,† Gwendolyn Morris-Dickinson, RPA-C, MS,‡ andTrip Shannon, MS‡

OBJECTIVE: To investigate the business case of postdis-charge care transition (PDCT) among Medicare benefi-ciaries by conducting a cost-benefit analysis.

DESIGN: Randomized controlled trial.

SETTING: A general hospital in upstate New York State.

PARTICIPANTS: Elderly Medicare beneficiaries beingtreated from October 2008 through December 2009 wererandomly selected to receive services as part of a compre-hensive PDCT program (intervention—173 patients) orregular discharge process (control—160 patients) and fol-lowed for 12 months.

INTERVENTION: The intervention comprised five activi-ties: development of a patient-centered health record, astructured discharge preparation checklist of critical activi-ties, delivery of patient self-activation and managementsessions, follow-up appointments, and coordination of dataflow.

MEASUREMENTS: Cost-benefit ratio of the PDCT pro-gram; self-management skills and abilities.

RESULTS: The 1-year readmission analysis revealed thatcontrol participants were more likely to be readmittedthan intervention participants (58.2% vs 48.2%; P = .08);with most of that difference observed in the 91 to365 days after discharge. Findings from the cost-benefitanalysis revealed a cost-benefit ratio of 1.09, which indi-cates that, for every $1 spent on the program, a saving of$1.09 was realized. In addition, participating in a caretransition program significantly enhanced self-managementskills and abilities.

CONCLUSION: Postdischarge care transition programshave a dual benefit of enhancing elderly adults’self-management skills and abilities and producing costsavings. This study builds a case for the inclusion of PDCTprograms as a reimbursable service in benefit packages.J Am Geriatr Soc 60:1051–1056, 2012.

Key words: postdischarge care transition; elderly; medi-care; cost-benefit

The hospitalization postdischarge period is critical,1

especially for individuals with complex care needs suchas elderly adults. This population is particularly vulnerableto experiencing fragmented care during transitions betweenthe various care contexts.2 As such, understanding challengesand adapting strategies to relieve some of the complexitiesusually present after discharge can affect outcomes of care.One such strategy is employing care transition programs,which are a set of actions intended to guarantee coordi-nation among healthcare practitioners and continuity ofmedical care as patients are transferred between locationsor between levels of care at the same location.3–5

Few studies have examined the clinical and resourceutilization effect of postdischarge care transition (PDCT)interventions. Most of these have reported favorableresults in terms of outcomes of care and reduced readmis-sions.4,6–8 Nevertheless, despite the encouraging potentialeffect of transition care intervention in reducing resourceuse and assisting older adults and their family members inmaking smoother transitions, system barriers exist thatprevent its widespread adoption. A number of thesebarriers are related to financial factors. An example citedfrequently is the structure of the reimbursement system,which has a built-in inherent incentive for readmissions(e.g., readmissions beyond a time window from an indexadmission are associated with separate reimbursement)that is being partly addressed through recent legislationthat qualifies payment for certain readmissions. Anotherbarrier is the lack of financial recognition and

From the *Department of Health Management and Policy, Faculty ofHealth Sciences, American University of Beirut, Beirut, Lebanon; †GlensFalls Hospital, Glens Falls, NY; and ‡Hudson Headwaters HealthNetwork, Glens Falls, NY.

The study was funded by a grant from the New York State HealthFoundation.

Address correspondence to Shadi S. Saleh, Department of HealthManagement and Policy, Faculty of Health Sciences, American Universityof Beirut, Van Dyck, Room IIIC, P.O. Box 11-0236, Raid El Sohl, Beirut1107 2020, Beirut, Lebanon. E-mail: [email protected]

DOI: 10.1111/j.1532-5415.2012.03992.x

JAGS 60:1051–1056, 2012

© 2012, Copyright the Authors

Journal compilation © 2012, The American Geriatrics Society 0002-8614/12/$15.00

compensation by payers for the delivery of such a readmis-sion-reducing intervention to beneficiaries. This is criticalfor hospitals that have investment in staff and physicalresources to establish a care transition program. Thesefactors have discouraged healthcare organizations fromengaging in PDCT programs because they are judged asbeing unworthy financially investments.

This study attempts to explore the financial viability ofPDCT programs through conducting a cost-benefit analysis.The main aim is to inform the decision as to whether thefinancial worthiness of PDCT programs merits separate oradd-on reimbursement or compensation. The study alsoinvestigates the effectiveness of care transition programs inenhancing patient self-management skills and abilities.

METHODS

Study Design and Population

The study was based on a randomized controlled trial.Elderly Medicare recipients being treated at a generalhospital located in a rural area in upstate New York fromOctober 2008 through December 2009 were randomlyselected to receive services as part of a comprehensivePDCT program (intervention) or provided with the regulardischarge process (control). This was done throughrandom selection of patients before discharge (Figure 1).The study research team obtained a daily census of Medi-care recipients being treated at the hospital and screenedfor inclusion and exclusion criteria into the study. Exclu-sions included dementia without a caregiver, severe psychi-atric conditions, planned readmission, end-stage renaldisease, primary diagnosis of tumors, assisted living with acoached caregiver, and nursing home residence. Individualswho were eligible were randomly assigned to the interventionand control groups based on medical record number. Thescreening was based on information from the individual’sadmission notes. Patients with odd medical record num-

bers were assigned to the intervention group and thosewith even numbers to the control group.

Data were collected from all participants in the inter-vention and control groups at discharge (initial evaluation)and after 6 weeks (repeated evaluation). Three hundredthirty-three participants were enrolled in the study: 173control and 160 intervention.

Intervention Overview

The intervention, with activities that spanned 45 days fromdischarge, was designed to address patient-centered care inmultiple settings, practitioners, and organizations forelderly Medicare beneficiaries. Individuals were approachedduring hospitalization; the intervention was explained, andconsent forms were signed. The intervention included threehome visits by the nurses who delivered the interventionand comprised five main elements or activities, some ofwhich are features in other main care coordination models.4

● Development of a patient-centered health record orpersonal health record that facilitates interdisciplinarycommunication.

● Development of a structured discharge preparationchecklist of critical activities designed to empower andeducate individuals, including medication reconciliation.The activities delivered included patient education, medica-tion management, personal health record, patient and care-giver expectations and understanding of social and supportneeds, and ambulatory follow-up.

● Delivery of patient self-activation and managementsessions designed to help participants and their caregiversunderstand and apply the transition care pillars to bettermanage their care.

● A follow-up appointment with a physician providerwithin 7 days of acute care discharge.

● Coordination of data flow, including availability ofdata for patient engagement, and financial analysis andpotential engagement with managed Medicare firms.

Data Sources

Assessing Self-Management Skills and Abilities

Evaluation of self-management skills and abilities was basedon the 15-item version of Coleman’s Care TransitionsMeasure survey,9,10 which assesses participants’ perceptionof self-management skills and abilities. The survey was con-ducted again at 6 weeks to reassess participants’ perceptionsof their self-management skills and abilities. For the purposeof comparing the results and assessing the difference betweenthe study groups, the surveys were similar in structure forcontrol and intervention participants.

Readmission and Cost-Benefit Analysis

Available de-identified hospital claims at the study institu-tion were used to examine readmission and charges.

Outcome Measures

The main outcome measures of the study were readmissionrates (further described below), cost-benefit ratio, andFigure 1. Recruitment of study participants.

1052 SALEH ET AL. JUNE 2012–VOL. 60, NO. 6 JAGS

effectiveness of the intervention as assessed throughparticipants’ perception of their self-management skills andabilities.

Data Analysis

Several statistical data analysis techniques were used. First,several variables were used to compare the medical statusof participants in the intervention and control groups atbaseline (upon discharge; chi-square tests), which alsoincluded the level of discharge risk that was assessed usingthe Island Peer Review Organization (IPRO) dischargecriteria.11 Data were analyzed using SAS version 9.1(SAS Institute, Inc., Cary, NC).

The index admission was identified as the firstadmission occurring during the study recruitment period(October 2008 through December 2009). Readmissionswere classified based on consequent admissions to thesame hospital, with the readmission period determinedaccording to proximity to the index admission (within30 days, within 90 days, and within 365 days). For thecost-benefit analysis, charges were classified as total,ancillary (e.g., diagnostic services during the stay), andaccommodation (mostly bed, meals, and nursing care)charges. The costs in the analysis comprised the costs ofthe program, including salaries and benefits of care tran-sition coaches, travel, and miscellaneous costs. Addi-tional costs incurred by the program such as externaldata processing were not included because such costswere necessary from an external evaluation perspectivebut would ideally not be included when such a programis implemented in a healthcare organization. The cost-benefit analysis was based on the costs of the programand the benefits realized from reducing readmissions.The monetary value of the latter was estimated basedon discounted charge rates, which is one of theapproaches for financial contracting between insurancecompanies and hospitals.12,13 The rate of discountemployed was 80%, a rate that Medicare used beforethe implementation of the inpatient prospective paymentsystem in 1983.14 Ethical approval for the study wasobtained from the hospital institutional review board.

RESULTS

Study Population Characteristics

Table 1 presents the hospitalization characteristics of thestudy population according to group. No major differ-ences were observed between the two groups in terms ofage and sex. Most participants had Medicare as theprimary payer, with secondary payers including BlueCross, commercial insurance, and Medicaid. Most partic-ipants were admitted through the emergency department.Control participants were more likely to have a routinehome discharge status than intervention participants,who were more likely to be referred to home care ser-vices. Assessing the medical condition of participants inboth groups at baseline using an IPRO risk classificationrevealed that the intervention group had more partici-pants classified as high risk than the control group(46.8% vs 35.7%, P = .03) (Table 2).

Effect on Patient Self-Management Skills

The difference between the repeated and initial evaluationsrevealed that the care transition program enhanced partici-pants’ degree of understanding in a number of areas. Theseincluded how to manage their health (P = .003), under-standing the warning symptoms and signs patients shouldwatch for given their health conditions (P = .004), under-standing the written plan that describes how healthcareplans are going to be met (P = .01), confidence in terms ofknowing what to do to manage their health (P = .03), andbeing able to do the things that they need to take care oftheir health (P = .03). Furthermore, participants in thecare transition program had a significantly better under-standing of the purpose of taking their medications thanthe control group (P = .008), whose understanding slightlydeclined between the initial and repeated evaluation. A

Table 1. Characteristics of Target Population—IndexAdmission

Characteristic

Total Control Intervention

n (%)

Age65–74 142 (48.6) 74 (48.4) 68 (48.9)75–84 106 (36.3) 59 (38.6) 47 (33.8)85–94 44 (15.1) 20 (13.1) 24 (17.3)

SexFemale 173 (59.2) 92 (60.1) 81 (58.3)Male 119 (40.8) 61 (39.9) 58 (41.7)

Primary payerMedicare fee for service 184 (63.0) 91 (59.5) 93 (66.9)Medicare managed care 90 (30.8) 54 (35.3) 36 (25.9)Other 18 (6.2) 8 (5.2) 10 (7.2)

Secondary payerBlue Cross 59 (20.2) 28 (22.3) 31 (22.3)Commercial 59 (20.2) 29 (21.6) 30 (21.6)Medicaid 41 (14.0) 24 (12.2) 17 (12.2)Other 133 (45.6) 72 (43.9) 61 (43.9)

Admission sourceEmergency department 267 (91.4) 139 (90.9) 128 (92.1)Physician referral 25 (8.6) 14 (9.2) 11 (7.9)

Discharge statusRoutine 159 (54.5) 88 (57.5) 71 (51.1)To skilled nursing facility 17 (5.8) 8 (5.2) 9 (6.5)To home care 110 (37.7) 51 (33.3) 59 (42.5)To acute facility 2 (0.7) 2 (1.3) 0 (0.0)To rehabilitation 4 (1.4) 4 (2.6) 0 (0.0)

Table 2. Assessing the Medical Condition of Partici-pants at Baseline

Risk

Total Intervention Control

n (%)

Low 95 (29.1) 43 (27.6) 52 (30.4)Medium 98 (30.0) 40 (25.6) 58 (33.9)Higha 134 (41.0) 73 (46.8) 61 (35.7)

a P < .05 based on IPRO discharge criteria.

JAGS JUNE 2012–VOL. 60, NO. 6 HOSPITAL-BASED DISCHARGE TRANSITION PROGRAM 1053

similar trend was observed when comparing the level ofchange in understanding the side effects of medications ofthe two study groups.

Readmissions and Cost Savings

The readmission analysis revealed that individuals in thecontrol group were more likely to be readmitted than theircounterparts in the intervention group (58.2% vs 48.2%,P = .08) (Figure 2), although there were differences in thereadmission rates according to period (time from indexadmission) for those who were readmitted in both groups.The 30-day readmission rate in the intervention group wasslightly higher than in the control group, although thatwas reversed when examining the readmission rates in the31- to 90-day interval or beyond.

The cost analysis was aimed at examining the potentialpayment savings of the intervention group and comparingthe savings with the program costs. The findings revealed atotal average savings of $1,034 per individual (differencein payment between intervention and control groups forreadmission, based on discounted charges) (Table 3) andprogram costs of $946 per individual in the interventiongroup. This resulted in a cost-benefit ratio of 1.09, indicat-ing that for every $1 spent on the program, a saving of$1.09 was realized from reduced readmission frequency.

DISCUSSION

The PDCT program is an intervention that has the poten-tial to enhance quality of care and reduce costs, especiallyin populations with complex healthcare needs. The elderlypopulation comprises a population segment for which caretransition programs can address an unmet need for conti-nuity of care and coordinated transitions between care set-tings.8 This study aimed to examine the business case for apostcare transition program targeted at elderly Medicarerecipients. The effect of such programs on self-manage-ment abilities and skills was also explored.

The findings revealed that the care transition programenhanced participants’ self-management skills and abilitiesin a number of areas, including degree of understanding ofhow to manage their health, understanding the warning

signs and symptoms to watch for given their health condi-tions, confidence in terms of knowing what to do tomanage one’s health, understanding of the purpose oftaking medications, and the side effects of medications.Such a finding is consistent with those of other studies,15,16

and is important in light of studies that have shown a gapbetween the needs of elderly adults in the transition phaseand the standard care currently provided in hospitals.17,18

Another set of findings, that was not statistically significantbut was noteworthy, revealed that individuals whoreceived care transition were less likely to be readmittedthan their counterparts who did not. The 30-day readmis-sion rate for the control group was less than that of theintervention, although the fact that the intervention startedafter discharge and continued for 45 days may explain thisobservation. It is possible that the effect of the interventionactivities is more evident during the latter stage of theintervention time window (45 days). The trend towardhaving higher readmission rates in the intervention groupthan in the control group was reversed when observing thewithin-90-day and within-365-day time windows. Thisindicates that the “superiority” of the control group inhaving fewer readmissions within 30 days was diluted,and actually reversed, when examining readmissionswithin 90 and 365 days. This differs from the results ofother studies that examined discharge planning interven-tions because most have tended to show a consistentlyhigher readmission rate among the control groups, evenwhen considering a longer follow-up period,6,19–21

although most of the transition care interventions exam-ined were shorter than the one being examined in thisstudy. From a policy standpoint, this finding of thestudy—not observing a favorable decline in the interven-tion group within 30 days—may not be ideal because mostreadmission time windows (for payment and nonpayment)that payers such as Medicare are monitoring as indicatorsare 30-day readmissions. As such, it may be advisablethat care transition interventions be designed to beshorter—preferably shorter than 30 days; these have alsoproven to be more effective and cost-beneficial than nointervention.

Examining the costs and benefits of investing in caretransition programs revealed that such programs were costbeneficial; every dollar spent in providing care transitiongenerated a monetary return of $1.09 due to lower read-mission rates. Similar findings have been observed in otherinvestigations that examined the effect of care transitionprograms on readmissions. These studies revealed a lowerrate of hospitalization and cost per admission associatedwith transitional care,4,7,22 although studies that focusedon care coordination programs with no associated transi-tional care component were not found to be financiallyviable.23 This highlights the importance of having a com-prehensive postdischarge transition program.

A number of limitations of the study are worthmentioning. The cost-benefit analysis considered the costimplications only of fewer hospitalizations without factor-ing in other costs, (e.g., other healthcare settings costs,transportation costs, caretaker costs, and other indirectcosts) that will make PDCT programs even more financiallyviable. The study was conducted in one hospital located ina semirural area, so findings have to be generalized taking

Figure 2. Overview of readmission status according to studygroup.

1054 SALEH ET AL. JUNE 2012–VOL. 60, NO. 6 JAGS

that into consideration, but because of the consistency offindings from this study with those of other similar studies,especially regarding the effect on readmissions, this maynot be a major limitation. Another limitation is that thesensitivities of change of the self-management skills andabilities measures have not been validated in repeatedassessment. The authors acknowledge this but felt that thefindings on the significant difference in improvementbetween the two study groups is worth noting.

There remain barriers to the widespread implementa-tion of PDCT programs, a number of which are financialand have to do with reimbursement structure and lack offinancial compensation for providing transition care. Anumber of recent Centers for Medicare and MedicaidServices (CMS) initiatives have attempted to address thesebarriers but have mostly focused on the reimbursementstructure. For example, effective October 2012, CMS willrecover hospital payments for readmissions occurringwithin 30 days of discharge from a stay involving pneumo-nia, heart failure, and heart attack. The payment reductionis capped at 1% the first year, 2% the second, and 3% thethird. The expectation is that more conditions will beadded in future years. Other financial approaches beingexplored through CMS demonstration projects are relatedto value-based purchasing, with 30-day readmission ratesadded to the list of measures assessed. In addition, demon-stration projects that explore bundled payments (AcuteCare Episode projects) that cover hospital and physicianfees for cardiovascular and orthopedic procedures areunderway. Perhaps the most relevant is the Care Transi-tions Project, a CMS demonstration project that was beingconducted in 14 communities during 2011. A QualityImprovement Organization that will partner with commu-nity stakeholders to implement strategies to reduce admis-sions will coordinate or lead activities in each of thecommunities.

In conclusion, it seems that the evolving thinking inthe healthcare field recognizes the need to approachepisodes of care in a more-comprehensive manner. It is thehope that the findings from this study and others willinform the policies resulting from such thinking.

ACKNOWLEDGMENT

Conflict of Interest: The authors of the paper have no con-flict of interest.

Author Contributions: Saleh S.S., Freire C., Morris-Dickinson G., Shannon T.: Study concept and design.Saleh S.S., Freire C., Morris-Dickinson G.: Acquisition ofparticipants and data. Saleh S.S., Freire C., Morris-Dickin-son G., Shannon T.: Analysis and interpretation of data.Saleh S.S., Freire C., Morris-Dickinson G., Shannon T.:Preparation of manuscript.

Sponsor’s Role: None.

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Table 3. Resource Use and Cost-Benefit Analysis Associated with a Postdischarge Care Transition Program inMedicare Recipients

Control, n = 160 Intervention, n = 173

Difference or

Savings

Readmission rate, n (%)a 89 (58.2) 67 (48.2) 10.0%Resource use per individual, $Accommodation charges, average 8,272 8,669 397Ancillary charges, average 13,365 11,674 1,691Total charges, average 21,638 20,345 1,293

Direct program costs in the intervention group, $Total personnel costs 141,107Travel and miscellaneous 10,238Total costs 151,345

Total program costs/individual in intervention group, $ (n = 160) 946Cost benefit analysis (payer perspective):difference in total payments between intervention and control groups, $b

1,034

Cost-benefit ratio 1.09

a Missing data not included in percentage calculation; 1-year readmission rate.b Estimating payment at 80% of charges.

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