Article Abstract

The economic case for US hospitals to revise their approach to heart failure readmission reduction

Authors: Armineh Zohrabian, Julie M. Kapp, Eduardo J. Simoes


To support hospital decision makers in their effort to reduce readmissions, the authors of this perspective present employer self-insurance as a potential incentive strategy, in particular for heart failure (HF). In 2010, US health reform identified hospital readmission as a key area for improving care coordination and achieving potential healthcare savings, and enacted the Hospital Readmissions Reduction Program (HRRP). In 2012, the Centers for Medicare and Medicaid Services (CMS) started the implementation of the HRRP by penalizing hospitals with excess 30-day readmission rates. The HRRP targets certain conditions, including HF, which is among the most expensive conditions treated in US hospitals. HF has the highest readmission rate for patients aged 65 and above, and its prevalence is expected to rise to over 8 million people by 2030 due to the aging population. Although the HRRP has been associated with reduced readmission rates, the rate of reduction has slowed. Furthermore, the HRRP may have alarming unintended consequences, such as possible increased mortality among HF patients. As a result, a critical analysis of financial incentives is needed to re-energize these efforts. One opportunity to incentivize readmission reduction is through employer self-insurance. More than half of colleges and universities self-insure the health care coverage they offer to their employees. With these self-insured plans, a hospital could be rewarded through shared savings with a university for readmission reduction. This perspective proposes that the economic case for a hospital to invest in readmission reduction is stronger when a hospital is a part of a self-insured university.