the voice of NHS leadership
briefing
Foundation Trust Network
February 2011 Issue 211
The impact of non-payment for acute readmissions Key points qThe Department of Health is introducing a system where local commissioners do not pay for emergency readmissions that occur within 30 days of discharge from an acute hospital following an initial planned stay. qThe new policy will mean a reduction in annual hospital income of around £790 million. qThis paper explores what the impact of this policy is likely to be, and suggests additional measures which would reduce the cost to hospitals to around £490 million.
Analysis provided by
The Department of Health (DH) has introduced a new policy of non-payment for acute hospital readmissions. This policy means that local commissioners will not pay for any emergency readmissions to hospital within 30 days of discharge from a previous planned hospital stay. The DH is instructing commissioners to extend this policy locally to cover a proportion of those readmissions following a previous emergency hospital stay. This Briefing presents the results of research from CHKS into how a system of non-payment for acute readmissions within 30 days could operate. It calculates the cost of the policy to acute trusts, including how this would change if various additional exclusions were applied. The Briefing concludes with the NHS Confederation’s consideration of the wider effects of this policy and other possible approaches to it, drawing on feedback from Foundation Trust Network members.
Background For several years the NHS has recognised that an increasing number of patients are being readmitted to hospital as an emergency soon after their initial discharge. The reasons behind such readmissions are highly complex, and studies have so far failed to identify the definitive drivers of this trend.1 What is clear is that there is no
single cause but a combination of different potential factors, including the availability of community services, changing patient expectations, changes in clinical practice and the level of coordination between acute hospitals, community services and social services. There are clear advantages in reducing unnecessary
briefing 211 The impact of non-payment for acute readmissions
readmissions, both to patients and the NHS. Avoidable readmissions are not in the interests of hospitals, the NHS or individuals; patients have a right to expect that they receive proper care in the first instance and that the necessary level of support will be in place after discharge.
The proposed new policy To help tackle this increase
briefing 211 The cost of non-payment for in readmissions, the DH is acute readmissions
introducing a system where local commissioners do not pay for any emergency readmissions (apart from a specific set of exclusions) that occur within 30 days of discharge from an acute hospital for an initial episode of elective care. The DH has instructed local commissioners extend this ‘Just under 6.5 to per cent of all policy to at least 25 per cent of the admissions are readmissions readmissions that occur following within 30 days, totalling an emergency stay in for hospital. £1.6 billion income
hospital trusts’
The DH accepts that some emergency readmissions do not equate to poor quality care. interests guidance of hospitals, NHS or Previous hasthe allowed individuals; patients have a right local commissioners to decide to expect that the care they which readmissions might receive is right first time and that the be excluded in any penalty 2 of support will be necessary level calculations. The current in place discharge. plans forafter 2011/12 combine a single national approach with expectations that local The proposed new policy commissioners will go further. To help tackle this increase in readmissions of The exclusionsthe to Department the nonHealth intends to introduce payment rule that have beena set system where local commissioners do not pay for any emergency readmissions (unless they are specifically excluded) that occur 02 within 30 days of discharge from
Readmissions – a complex issue CHKS analysis of the hospital episode statistics database has revealed how complex some trails of hospital readmissions can be. Around 20 per cent of readmissions are to a different hospital than the original admission. Some patients, particularly those with long-term conditions, appeared to be travelling around the country for treatment. Others were being readmitted to several hospitals within the same geographical location. In one of these cases, a 63 year-old male patient had 72 separate admissions to 50 different trusts within one year for treatment relating to heart disease.
2012, hospitals will be expected to assume responsibility for many aspects of a patient’s care in the 30 days after discharge. This represents a significant change from the traditional NHS policy of the GP being responsible for coordinating patients’ care.
apply for readmissions relating to maternity, children under the age of four, treatment of patients with cancer and admissions to mental health services. The DH expects that money saved from this policy next year will be reinvested by local commissioners in other services that help patients’ recovery after discharge from hospital. From
A reality check Readmissions is a complex issue and any changes to policy in this
Figure 1. Growth in emergency readmissions over time Figure 1. Growth in emergency readmissions over time of emergencyreadmissions, readmissions, % % RateRate of emergency
‘8.3 per cent of all admissions are readmissions within 30 days, totalling £2.2 billion income for hospital trusts’
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12 10 8 6 4 2 0 9
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Part inin readmissions cancan be accounted for byfor theby overall rise in rise in Partofofthe therise rise readmissions be accounted the overall 3 3 emergency (11.8% since 2004/05 ). However, this cannot ). However, this cannot emergencyadmissions admissions (11.8% since 2004/05 completely thethe trend. completelyexplain explain trend. Source: National Centre for Health Outcomes Development; Hospital Episode Statistics online
Source: National Centre for Health Outcomes Development; Hospital Episode Statistics online
poor quality care. Current guidance is that it is up to local commissioners to decide which
Under this approach exclusions would apply for treatment for patients with cancer (including
briefing 211 The impact of non-payment for acute readmissions
Foundation Trust Network
area should be implemented carefully. Researchers at CHKS have undertaken in-depth research into emergency readmissions and the potential financial impact of any penalties. The NHS Confederation believes that the findings offer a reality check on the current proposals and raise questions about how the policy should be implemented locally to avoid unintended consequences.
Integrating hospital and community care
What did the research find?
with particularly high rates in urban areas such as London. This raises issues around establishing responsibility and administering the non-payments policy.
CHKS examined emergency readmissions for all hospitals in England using the hospital episode statistics database for July 2009–June 2010. During this period, 1,182,000 patients were readmitted to hospital within 30 days. This is equivalent to around 8.3 per cent of all admissions. When the tariff is applied this equates to an income of £2.2 billion for hospital trusts. Of these 30-day readmissions, CHKS found that in 70 per cent of cases the original admission was for emergency care and in 25 per cent of cases it related to elective care (in other words, to planned treatment). The remaining 5 per cent of cases were either babies or transfers from one hospital to another. Some analysis of trends in emergency admissions from 2003–2009 was undertaken, but no strong relationship between length of stay and proportion of readmissions was observable. The analysis also revealed that around 20 per cent of readmissions are to a different provider to the original hospital,
The language used by the Secretary of State has been about the better integration of hospital and community care to reduce unnecessary admissions and to avoid patients being discharged without appropriate support. There is some evidence that readmission rates are partly driven by the availability of community services (see Figure 3). However, it is hard to put a figure to this relationship. Anecdotal evidence, collected by CHKS, revealed one hospital treating patients from two primary care trusts (PCTs) where the readmission rates for patients are significantly different depending on which PCT they are from.
What does a readmission mean? One of the fundamental problems facing policy-makers is the difficulty in establishing whether an individual readmission is in any way linked to the previous episode.
To help identify patients who are readmitted for the same health issue as their first admission, CHKS used healthcare resource groups (HRGs), which are used to calculate the payment for the patient’s hospital episode. These showed that 24 per cent of patients were readmitted for the same HRG as the original admission. Given the specificity of HRGs, CHKS also looked at readmissions by HRG chapter (a more general grouping with less variability for
Figure 2. Readmission rates by trust 12% 10%
8%
6%
4%
2%
0%
(average = 6.6%)
03
briefing 211 The impact of non-payment for acute readmissions
briefing 211 The cost of non-payment for acute of readmissions ‘Half readmissions have the
same HRG chapter for both the original admission and the readmission, but identifying a causal link is difficult’
slight differences in the patient’s ‘Establishingand causation is very presentation) found that 50 per cent of patients were difficult because thereadmitted majority ofin the same chapter. readmissions are amongst the elderly, who often have multiple This means that half of complex conditions’ readmissions are for a very different health issue. However, it is still not entirely clear whether these issue as their first admission, CHKS are connected or not. Some will used healthcare resource groups undoubtedly be for unrelated (HRGs), which are used to calculate incidents, such as a simple elective the payment for the patient’s procedure followed by a showed trauma hospital episode. These caused by an accident. Others that 24 per cent of patients were may be causally linked, readmitted for the samesuch HRGas as athe surgical admission followed by original admission. Given the aspecificity readmission for a respiratory of HRGs, CHKS also problem. are veryby difficult looked atThese readmissions HRG tochapter identify, because the (a however, more general grouping majority emergency readmissions with lessofvariability for slight
Foundation Trust Network
are amongst the elderly, who often have multiple complex conditions (for example, diabetes, heart and respiratory problems). To avoid some of these highly complex issues, various types of readmission are excluded from any system differences inof thenon-payment. patient’s presentation) that to A judgementand willfound also need 50 centon of what patients beper made is awere clinically readmitted the same chapter. acceptableinlevel of readmission for different conditions. CHKS This thatthe half of hasmeans analysed exclusions readmissions are for a that the government very has set, as different health issue. However, it well as putting forward some is still not entirely clear whether further potential exclusions. The these are connected or not. Some following section what the will undoubtedly beoutlines for unrelated financial impact of each of incidents, such as a simple these modifications would be onbyacute elective procedure followed a trusts. trauma following an accident. Others may be causally linked, such as a surgical admissionand Potential exclusions followed by a readmission for a their impact respiratory problem. These are Thedifficult initial announcement of very to identify, however, the policy because thequoted majoritytotal of annual
readmission figures of “around 500,000 patients” nationally.4 This appears to be based on the National Centre for Health Outcomes Development (NCHOD) report on emergency readmissions, which included a number of exclusions. It explained: emergency readmissions are “Patients withinwho the often mental amongst the elderly, and maternity specialties, havehealth multiple complex conditions (for example, heart and as well asdiabetes, those with a diagnosis respiratory problems). of cancer, have been excluded
because in these cases emergency
To avoid some of these highly readmission is often considered a complex issues it is likely that necessary part of care.”5 various types of readmission will need to be excluded from any It is probably fair to exclude all system of non-payment. A cases with a primary cancer judgement will also need to be diagnosis, maternity events and made on what is a clinically readmissions of young children as acceptable level of readmissions all of these are likelyCHKS to fallhas into the for different conditions. category of open access services tried to identify the most sensible being given and(patients relevant of these. The the option to come back whenever they need following section outlines what to). Readmissions for mental the financial impact of each would health already been excluded be on acutehave trusts.
Rate of emergency
Rate of emergency readmissions, readmissions, % %
Figure number of ofcommunity communitybeds bedshave havelower lowerreadmission readmissionrates rates Figure3. 3.Regions Regions with with a higher number 13.00 13.00 12.00 12.00 11.00 11.00 10.00 10.00
RR22==0.3541 0.3541
9.00 9.00 8.00 8.00 0.0 0.0
0.5 0.5
1.0 1.0
1.5 1.5
2.0 2.0
2.5 2.5
Community availableper per1,000 1,000 elderly population Community bedsbeds available elderly population 2008/09
2008/09
2007/08
2007/08
2006/07
2006/07
Trend line
Trend line
Source: National Centre for Health Outcomes Development; Department of Health; Office of National Statistics Source: National Centre for Health Outcomes Development; Department of Health; Office of National Statistics
04
briefing 211 The cost of non-payment for acute readmissions briefing 211 The impact of non-payment for acute readmissions
readmission figures of “around 500,000 patients.”4 This appears to be based upon the National throughout this Briefing, as Centre for Health Outcomes there is currently no tariff report for it. on Development (NCHOD) Excluding cancer, maternity and emergency readmissions, which children under four reduces the included a number of exclusions. impact on acute trust income Its explanation is as follows: from £2.2 billion to £1.7 billion for 910,000 episodes. “Patients within the mental
health and maternity specialties, The as new policy applies to well as those withonly a diagnosis readmissions following an initial of cancer, have been excluded planned admission hospital. The because in thesetocases emergency logicreadmission behind thisisisoften that hospitals considered a should have ‘got it right first necessary part of care.”5 time’ and therefore subsequent admissions within month should It is probably fairato exclude all becases unnecessary. While there is with a cancer diagnosis, some sense in this, given maternity events and that only half of readmissions are to the readmissions of neonates as all of same clinical area, establishing these are likely to fall into the causality is of difficult, as outlined category open access services above. Looking at only (patients being givenreadmissions the option to come back whenever need that followed a previousthey elective to). Readmissions forimpact mental admission reduces the have already beenfrom excluded onhealth income to £480 million throughout this Briefing, as there 270,000 episodes. is currently no tariff for it. The DH has also instructed local Excluding cancer, maternity commissioners to deliver at and neonates reduces the scale least a 25 per cent reduction on of the impact on acute that trustfollow emergency readmissions to £1.2 billion from anincome initial non-elective admission. 690,000 episodes. This rate will be negotiated locally and should be based on clinical MostNationally, paediatrican services operate audit. additional with an open access policy and 25 per cent of these readmissions therefore it would seem logical equates to an additional 160,000 patients, assuming the same exclusions are used.
Taken together, therefore, the total impact on hospital income will be
Figure 4. Financial value of readmissions following potential Figure 4. Financial value of potential exclusions exclusions 1.8 900 1.6 800 1.4 700
£Millions(£ billions) Non-payments
‘Establishing causation is very difficult because the majority Potential exclusions andof readmissions are amongst the their impact elderly, who often have multiple The Secretary of State has quoted complex conditions’
Foundation Trust Network
1.2 600
5001 0.8 400 0.6 300
0.4 200 0.2 100 0
AsNone per guidance
Cancer, maternity Cancer &– neonates all
Children
