Pay for performance

Tuesday, July 20, 2010

FORD CITY, Pa. - Thanks to a provision buried deep inside this year's healthcare reform bill, beginning in 2012, Medicare will reduce or withhold reimbursement to hospitals for patients readmitted within 30 days. Anticipating that change, Klingensmith Healthcare kicked off a pilot disease state management (DSM) program for COPD in December. The program is designed to reduce readmissions and includes, among other things, a variety of education and follow up during the patient's first 30 days on oxygen. If successful, it could be a way, finally, for providers to get paid for their services. Halfway through the pilot, "we're getting people to say, 'Wow. We need to take a look at this," said Kim Wiles, vice president of respiratory services. It's easy to see why. A hospital readmission can run between $12,000 and $24,000, and those kinds of numbers easily catch the attention of hospital officials. HME News recently talked to Wiles about the company's new Discharge + Assessment & Summary @ Home program.

HME News: You began the program in December. How has it been going?

Kim Wiles: We're thrilled with the data. Right now we have 96 patients in the program. We've had 12 readmissions, but only four of those were due to COPD.

HME: What's the average readmission rate for COPD patients?

Wiles: It's like 22% to 25% for COPD and pneumonia within the first 30 days.

HME: You are not charging for these extra DSM services right now, but how much do you think they are worth?

Wiles: The program has taken a lot of upfront cash. It's a commitment. This is the first phase, but when we start looking at the amount of money that we've saved, at that point we can put a price on it. The key is for people to see our value. I don't think anyone realizes the services we provide and we've been saying that for years. I'm trying to remove the mindset, and I know it is a big goal, that we are just equipment jockeys. As a clinician, it kills me that we don't get paid for our services in the home.

HME: If you are able to prove significant savings, it seems logical that hospitals would be willing to pay for these services, rather than eat the cost of a readmission.

Wiles: Right now, readmissions are revenue to them. Some see our program and think, 'Oh, my, gosh. We're going to lose that'. I think that when it gets closer to the time that (money) will be taken away, they'll be pushed.

HME: If you have a proven program to reduce hospital admissions and your competitors do not, that's seems like a major advantage in the coming era of pay for performance.

Wiles: Absolutely. That is our key thinking. Why shouldn't we be paid on performance? I would love for all companies to be paid for performance.