Readmissions Cost Medicare Billions

The News-Press examines high Medicare costs, looking at data recently published in the New England Journal of Medicine that shows how hospital readmission costs billions. "Almost one of every five Medicare beneficiaries - about 18 percent - returns to the hospital within 30 days of leaving. Three months after discharge, a third of beneficiaries will be back. The cost for unplanned readmissions: $17.4 billion in 2004," the News-Press reports.

The newspaper covers one local hospital's efforts to reduce readmissions in Southwest Florida while also examining the larger national context. "Readmissions have become a front-burner issue for hospital executives and government policy makers. The Medicare Payment Advisory Commission, or MedPAC, has recommended public reporting of hospital readmission rates as an accountability measure, which Florida has already done," the New-Press notes. "The commission is also recommending a kind of lump-sum reimbursement for hospitals and other providers for the 30 days that follow a hospitalization, forcing a coordination of care. There's even talk, though it's preliminary, about trimming Medicare reimbursements to hospitals that have consistently high readmission rates." The paper also notes that there "is no financial incentive for hospitals to curtail their readmissions" because "they get paid every time an insured patient is admitted." Reasons for readmissions include a loss of health insurance due to unemployment, a lack of primary care and an inability to pay for prescription drugs (Reed, 5/27).

Meanwhile, disclosure reports were released that indicate two health insurance companies' spending to lobby on Medicare issues. The Boston Globe reported that "Cigna Corp. spent $450,000 lobbying on health insurance and Medicare-related issues during the first quarter." Cigna lobbied on "Medicare prescription drug programs and issues tied to defined benefits and pensions" among other issues (5/26).

Additionally, the Associated Press reported that Aetna Inc. "spent $809,793 in the first quarter to lobby on Medicare and broader health care issues." Aetna lobbied on government-run negotiations of Medicare drug prices and the promotion of generic drugs in Medicare among other issues. Both companies lobbied Congress, the White House and the Centers for Medicare and Medicaid Services among other outlets (5/26).