Minnesota Example Illustrates Need for Chronic Care Coordination

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One example of a program designed to prevent hospital readmissions is the St. Mary’s/Duluth Clinic (SMDC) Health System Heart Failure Program. The national average for hospital readmissions after six months for patients with congestive heart failure (CHF) is 40 to 50 percent. Minnesota’s state average is 20 to 25 percent, and the SMDC’s CHF readmission rate is 3 to 4 percent.[i] The SMDC achieved a low rate of readmissions and improvements in patient health and satisfaction by delivering outpatient services that included treatment planning, disease and medication management services, use of telescales and telephonic oversight, education for patients and relatives, and support groups. Overall costs for patient care were cut in half. [ii]  

While the SMDC can be proud of its accomplishments, the Heart Failure Program caused a major loss in revenue for the health system owing to significant uncompensated costs for outpatient services that were not covered, including telescale and patient monitoring. In addition, the hospital realized decreased revenue with fewer CHF patient admissions.
Partly as a result of this program, Minnesota recognized that its payment models in use through private payers, Medicaid, and the Medicare program did not align with the achievement of the state goal of higher quality, lower cost health care. Transformational reform cannot take place unless innovative, care-improving providers are rewarded for their efforts rather than punished. That is why the state, as part of its comprehensive health reform efforts, is developing a “baskets of care” payment model.  Under this model, the state will establish the parameters, and providers will set a price, for a series of baskets of care. Providers will be reimbursed this set price for all care related to a specific diagnosis or chronic condition, or for episodes of care, such as full joint replacements (including pre- and post-operative care). The goal of the approach is both to ensure that prices and quality of services are transparent, but also to encourage providers to use the most cost-effective, quality-improving methods to achieve health outcomes for their patients. It will reward high quality, efficient care like that being provided at SMDC.

[i] “Heart Failure Disease Management Improves Outcomes and Reduces Costs,” Agency for Healthcare Quality and Research. http://innovations2staging.silverchair.com/content.aspx?id=275.
[ii] Ibid.