The Impact of Reducing Avoidable Admissions

THE IMPACT OF REDUCING AVOIDABLE ADMISSIONS ON U.S. HOSPITALS POTENTIALLY AVOIDABLE ADMISSIONS ARE THESE ADMISSIONS EQUATE TO $9.5 MILLION IN ANNUAL 10-14% OF ALL ADMISSIONS FOR MOST HOSPITALS "AT RISK" PROFIT FOR AN AVERAGE 300-BED HOSPITAL PERCENT OF US HOSPITALS, 220 HOSPITALS, 2011 PERCENT OF CONTRIBUTION PER HOSPITAL BY AVOIDABLE CONDITION, 110 HOSPITALS, 2011 12.6% U.S. AVERAGE 70- POTENTIALLY AVOIDABLE ADMISSIONS BACTERIAL PNEUMONIA CONGESTIVE HEART FAILURE 60- 30% 24% 50- $9.5 >> 40- MILLION CONTRIBUTION? 30- 20- 13% 9% 10- 10% COPD OR ASTHMA IN OLDER ADULTS O to 4 DIABETES WITH SHORT-TERM 5 to 9 10 to 14 15 to 19 20+ POTENTIALLY AVOIDABLE ADMISSIONS COMPLICATIONS URINARY AS % OF TOTAL INPATIENT ADMISSIONS TRACT INFECTION FOOTNOTES: SOURCES: • Objective Health de-identified client data • Premier discharge database • Agency for Healthcare Research and Quality (AHRQ) Prevention Quality Indicators (PQI) criteria • bjective Health analysis OBJECTIVEHEALTH" 1. Avoidable admissions calculated based on ICD-9 diagnosis and procedure codes of 11 conditions as defined by the Agency for Healthcare Research and Quality's (AHRQ) Prevention Quality Indicators 2. Net revenue calculated based on analysis of CMI-adjusted Medicare rates. Ratios of 1.4, 0,5, and 0.1 were applied to Commercial, Medicaid, and Self-pay payors respectively to estimate net revenue for all payors. Ratios calculated based on 15 de-identified client hospitals with average payor mix: Medicare = 43%; Commercial = 30%; Medicaid = 18%; Self-pay = 5%; Other = 4%. Contribution is net revenue minus variable costs; variable cost is equal to 50% of total costs. Costs are calculated based on analysis of 110 hospitals with cost accounting. A MCKINSE Y. SOLUTION FOR HEALTHCARE PROVIDERS Copyright 2012, Objective Health, a Mckinsey Solution for Healthcare Providers. OF HOSPITALS