Health care providers and employers across the U.S., including many in the Greater Houston area, are implementing strategies that aim to keep people healthier and out of hospitals.
Financial incentives initiated in 2010 and 2012 as part of the Affordable Care Act. They include tax breaks for instituting employee wellness programs and increasing penalties for high patient readmission rates; such incentives are pushing both providers and consumers to look at health care from a preventive standpoint to save money on rising costs.
“Most of your health conditions or health care costs are the result of chronic health conditions,” said Chris Skisak, executive director of the Houston Business Coalition on Health. “The theory being if you can prevent these chronic health conditions from manifesting themselves, you will impact the cost trend.”
Employers embrace wellness
Wellness programs are increasing in the Houston business scene, according to research from health care nonprofit Texas Business Group on Health. The organization found that more than 70 percent of surveyed employers statewide offered some kind of wellness program in 2015, which is up from 58 percent in 2008.
Wellness programs continue to rise as business leaders attempt to recruit and retain talented employees who expect it as part of the benefits package, Skisak said.
“A part of it is recruitment and a part of it is retention, especially for millennials,” he said. “They want to be able to have yoga classes and gym memberships. [Employee wellness program offerings are growing] more because everybody else has them.”
Large employers in the Sugar Land and Missouri City area, such as Fort Bend ISD and Memorial Hermann Sugar Land Hospital, are also increasing their employee wellness offerings. FBISD, Fort Bend County’s largest employer with approximately 10,000 employees, increased its penalty for those who do not complete a biometric screening and health assessment from $40 to $50, according to FBISD Chief Financial Officer Steven Bassett.
The district already offered bootcamps, L.A. Fitness discounts and organized walks, but this year FBISD is also partaking in Real Appeal. The program from United Healthcare provides weekly coaching and tools for weight loss.
“Weight has a lot to do with folks’ propensity to get diabetes,” he said. “If we can help people manage their weight, or lose weight to move away from getting diabetes, that will have a huge effect on our plan.”
The options were added to help the district reduce expenses on the employee insurance plan. FBISD had a $6.2 million deficit from July 2015 to June 2016 due to claims outweighing employee and district contributions to the plan, according to district documents.
“Because we don’t want to increase premiums, the only way to increase the costs of the plans is to change cost of claims,” Bassett said.
Meanwhile, Memorial Hermann Sugar Land began a farmers market on site to offer produce to staff and visitors alike. The next market is Nov. 8 from 11 a.m.-1:30 p.m. in the building’s lower level connector, according to a news release.
“The whole thing started as a way to provide a convenient location for our staff and visitors to purchase fresh, seasonal, affordable produce,” Operations Manager Roon Bergen said in a statement. “So far, the response has been wonderful, and they just keep getting bigger each time we do them.”
The market also has cooking demonstrations using the produce available for sale.
Employers were also given a financial incentive from the federal government to offer additional employee wellness options. In 2014, a new ACA rule went into effect that allows employers to incentivize wellness programs by covering up to 30 percent of the total cost of an employee’s premium coverage for participating in a wellness program, according to the U.S. Department of Labor. Incentives were previously allowed to cover up to 20 percent.
The maximum reward was increased to as much as 50 percent of an employee’s premium for programs designed to prevent or reduce tobacco use.
Reducing hospital readmissions
The Hospital Readmission Reduction Program, or HRRP, was implemented through the ACA in 2010. The first penalties went into effect in fiscal year 2012-13.
The program was designed to combat high readmission rates—the number of patients readmitted to a hospital within a month of treatment at that hospital. High readmission rates add billions of dollars to the cost of treating Medicare patients because some readmissions are preventable.
About 2 million patients return to a hospital per year, costing Medicare $26 billion, of which around $17 billion comes from potentially avoidable readmissions, according to the Centers for Medicare and Medicaid Services.
“Being readmitted to the hospital can be stressful, and it has implications on the care that [patients] were receiving in the hospital,” said Cristina Boccuti, associate director for the Kaiser Family Foundation, a nonprofit that studies health policy analysis and reports about public health. “[Lower readmission rates] also may result in lower Medicare spending because hospitalizations are very expensive for Medicare. Reducing the readmission rate helps patients and Medicare.”
Hospitals are fined by the HRRP based on how they perform compared with national readmission rates over a three-year period.
HRRP officials expect to levy fines totaling $528 million in penalties for fiscal year 2016-17, up from $428 million in 2014-15, according to the Kaiser Foundation.
“Health systems are only going to continue to be more and more challenged on how we keep people out of hospitals instead of admitting people—that’s sort of what our future has in store for us in terms of the health care industry,” said Heath Rushing, senior vice president and CEO of Memorial Hermann Northeast.
The maximum penalty—currently 3 percent of a hospital’s total Medicare payout—has increased from 1 percent in 2013, Bocutti said. About 83 percent of hospitals nationwide received no penalty or a penalty of less than 1 percent of its Medicare payout, according to the Kaiser Foundation.
“Readmission rates have gone down nationally for Medicare patients,” Bocutti said. “They were generally flat for several years and started to go down. The beginning of when they started declining was in 2012. They have inched down since then.”
Hospital systems adjust
With the CMS adding conditions each year to the list of readmission penalizations, large hospital systems— such as Houston Methodist and Memorial Hermann—and individual hospitals are having to find new ways to address preventive care with patients.
Hospitals have been taking several steps to lower readmissions, such as clarifying patient discharge instructions and coordinating with a patient’s primary physician, Bocutti said.
Janice Finder, director of Health and Performance Improvement at Houston Methodist, said programs have been developed to address Medicare changes and to fit patient needs. Three years ago, Finder said Houston Methodist developed the Better Outcomes for Optimizing Safe Transitions program, which assessed what factors might bring a patient back to the hospital.
“As a result, we also increased our efforts to recruit and retain primary care physicians so patients discharged from the hospital had a physician to regularly see,” she said.
Finder said the hospital system will continue to find ways to keep readmission rates down to ensure a quality experience for patients.
“During the hospital visit, the patients are often too sick to really learn, but 48 hours prior to discharge, we start to educate them and their family so by the time they are discharged, they understand,” she said.
Additional reporting by Amelia Brust
