Learning from the readmissions policy

The readmissions policy (non-payment for readmissions within 30 days) has been a feature of the system payment rules for several years now. The rationale is that providers should get it right first time – and who would disagree with that?

Its implementation, however, has led in many cases to providers being penalised financially for reasons beyond their control: there is an insufficiently sensitive link with the cause of the readmission. Few readmissions are due to provider fault and some have even suggested that greater numbers of readmissions could be an indicator of higher quality treatment at first presentation.

As the system gears up to take a fundamental look at pricing, what lessons can be drawn from the policy, in terms of preventing readmissions and better reflecting quality in the payment system?

Pricing needs to support the sustainable delivery of services by enabling both cost recovery and a margin for capital investment, alongside a reasonable efficiency requirement. It should enable quality improvement, for example by working in alignment with a longer term contracting and commissioning system. Fundamentally, what counts is integrity and providers being paid properly for the care and service improvements they deliver.

Business rules such as the readmissions policy can be useful in sending signals to the market on quality improvement priorities, but their application should not undermine confidence in the payment system. The Foundation Trust Network (FTN) is concerned that the readmissions policy (as well as the 30% marginal rate for emergency admissions over 2008-9 levels) has not had the desired effect and promoted the right system behaviours.

FTN lobbying on the readmissions policy secured a clinical audit process that links non-payment more closely with provider fault – though this remains a blunt instrument and there is still a strong argument for change. The intent of the readmissions policy (getting it right first time) and its application in practice (adding to provider risk) for me raise two key questions about the future development of the pricing system:

How far can the pricing system work in support of patients avoiding crises and promote care out of hospital (primary, community and self care) – especially for vulnerable older people and those with long-term conditions?
This is a system issue where commissioners and providers have a shared interest and responsibility in getting it right. The incentives, levers and accountabilities to achieve this need to speak to everyone in the system and support collaborative approaches – organised around doing the right thing by patients.

Funding flows across health so care settings should align to enable resources to reach the right place in the pathway; and provider innovations and partnerships should be supported and encouraged as a means of achieving this (some good examples are in our report done with ACEVO and The King's Fund). The readmissions policy does not support collaboration as well as it might, despite the clinical review process.

How and how far should quality achievement and improvement be reflected in the reimbursement system?
The system will need to reach a view on how it will recognise and reward quality improvement – there are many ways this could be approached. Clarity on the respective roles of pricing, contracting, commissioning and regulation will be important. Pricing alone should not be expected to achieve too much and enablement is more important than prescription.

Pay-for-performance schemes, such as CQUIN in England, attempt to reward quality directly and could have a bigger role in future. For example, CQUIN has been an effective means of reducing the incidence of venous thromboembolism (though changing the metrics to suit new priorities too often could mitigate impact as there is normally a recurrent cost to maintaining performance).

Promoting collaborative approaches through shared local CQUIN objectives, inclusive of primary and social care, is worth exploring more widely. Readmissions avoidance/management could reasonably feature in such schemes. There should be acceptance of the need to develop capability in determining local measures that support local priorities alongside tolerance of this journey – transformative success is likely to emanate from devolved ownership.

Opportunities to look at how to incentivise quality improvement in such a wholesale way as now, are rare. The emergent architecture is complex and relationships are forming, but there is clear potential to get the system alignment in place to promote the necessary collaboration. Collaborative behaviours are perhaps easier when resources are plentiful, but they are more necessary when limited as now.

Mark is Head of Policy at the Foundation Trust Network