Market Insight

Reduced reimbursement for COPD patient readmissions

June 25, 2014

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Despite a number of recent measures to curb healthcare spending in the US, increased expenditure is continuing to rise in order to provide sufficient care to an increasing number of chronically-ill patients. One measure to tackle rising healthcare costs is to reduce reimbursement payments; with an increasing number of patients, payment rates cannot be maintained if healthcare spending is to be addressed.

Readmission of patients after discharge is one of the largest costs to healthcare providers, and is believed to indicate a poor quality of care. In an effort to tackle sources of high expenditure while improving the quality of care, a provision was included in the Affordable Care Act to reduce reimbursement payments to hospitals where patients are readmitted within 30 days of discharge. This legislation was effective from October 2012, and covered acute myocardial infarction, heart failure and pneumonia. There are now plans to include chronic obstructive pulmonary disease (COPD) in the program by October 2014, highlighting the need to more effectively manage our COPD population.

Nebulisers are often used for medication delivery to COPD patients. However, there is uncertainty in the industry of the impact that changes to reimbursement will have on the nebuliser market. While some believe that this will drive an increase in demand for nebulisers, others are less certain.

The aim of reducing reimbursement for readmission of patients is to ensure that patients receive a sufficient standard of care. For many respiratory patients, treatment will not cure their disease; this is the case with COPD, where patients must manage their disease. Consequently, many patients will be discharged with a home-use therapy to allow them to manage their disease at home, in further efforts to reduce healthcare expenditure. Decline of the patient’s condition comes not only from a lack of quality care in the hospital, but from a lack of compliance and a comprehensive understanding of how to use the prescribed device. This cannot be addressed by increasing the number of nebulisers purchased. To ensure patients fully understand the importance of using the device frequently and correctly, further training may be required by respiratory therapists. This service is not currently reimbursed; however, this will add to the work-load of the therapist, potentially decreasing their efficiency.

Furthermore, patients must procure replacement devices from a certified Medicare supplier as a result of the Competitive Bidding Program. As price is increasingly important in winning these contracts, there is concern over the quality of devices being provided. A balance must be struck to ensure that the devices available for patients provide sufficient care, to reduce the rate of readmission.

Additionally, COPD patients often have co-morbidities, including heart disease, diabetes or osteoporosis. Patients are often required to use multiple therapies throughout the day to manage their condition, which can lead to a lack of compliance. Better understanding of a patient’s treatment regimen and combining different therapies, where possible, may lead to increased compliance and reduced readmission.

In summary, reducing readmission of COPD patients must be centred around providing better quality care for patients, and ensuring patient compliance. It is the quality of care, not the quantity of care, which must be addressed. With increasing incidence of COPD projected to continue, ensuring high-quality care will reduce the likelihood of newly diagnosed patients being readmitted. The focus on quality may drive a transition towards premium devices, to ensure better quality care. However, limited healthcare budgets in the US may delay purchase of these devices until the devices currently being used reach the end of their life, as opposed to upgrading existing devices before it becomes necessary.

Research by Market
Healthcare Technology
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