NHS hospitals face high cost of return

Hospitals could lose up to £1.5bn a year under tough readmission plan

Hospitals will be penalised if patients return within 30 days of being discharged.

Hospitals could lose up to £1.5bn of NHS funding a year because of the government's decision to penalise those where patients return within 30 days of being treated. That is the conclusion of research conducted by health analysts Dr Foster into the potential impact of the tough new policy. It warns that NHS trusts face large potential losses, the biggest could reach £28.7m, as a result of the new approach. In all, 146 acute, specialist and mental health trusts could lose out.

The study – to which Dr Foster has given SocietyGuardian first access – will make grim reading for the chief executives and medical directors of the affected trusts across England, where the policy will apply. It is the first attempt to calculate how much income NHS trusts could lose under the health secretary's plan.

Andrew Lansley wants to force the NHS to provide better care in hospitals and mental health establishments, to keep treating patients there until they are fit to leave and to work more closely with community-based healthcare professionals, such as GPs and district nurses, to ensure sick people receive more help with their convalescence after discharge and so are less likely to return to hospital. "Making hospitals responsible for a patient's ongoing care after discharge will create more joined-up working between hospitals and community services and may be supported by the developments in re-ablement and post-discharge support," he says.

Dr Foster's study, based on hospitals' records of patients who were readmitted within 28 days – rather than the 30 days stipulated by Lansley – warns that in 2009 hospitals received £1.49m for treating 820,395 patients who were readmitted within 28 days of undergoing surgery, 6.7% of the total.

Hospitals will lose some or all of that money once the policy comes into force. The Department of Health has yet to spell out if hospitals will no longer be paid for treating any patients who come back within the limit, regardless of the reasons, or just those with certain medical conditions. That will happen "in due course", the department says.

But, as Lansley said when he outlined the change this month: "We're going to ensure that hospitals are responsible for patients not just during their treatment but also for the 30 days after they've been discharged. It will be in the interests of the hospital for patients to be discharged only when it is ready and safe for them to do so. And if a patient is readmitted within those 30 days, the hospital will not receive any additional payment for the additional treatment … We are sending a clear message that patient care doesn't end when they walk out of the hospital door."

If it turns out to be a blanket policy of no money for any readmission, Dr Foster estimates that University hospitals of Leicester NHS trust could lose £28.7m – the most of any of the 146 trusts. That is because in 2008-09, 16,331 of the 210,531 patients it treated, 7.8%, came back within the time frame. The other big losers, on Dr Foster's analysis, would include Leeds teaching hospitals NHS trust (£26.2m) and Nottingham University hospitals NHS trust (£25.7m). Gateshead health NHS foundation trust had the highest rate of readmissions within 28 days – 10.4%. The joint lowest, on 4.8%, were Chelsea and Westminster hospital foundation trust, West Hertfordshire hospitals trust and Hereford hospitals trust.

The survey also looked at who was treated and what for. The three conditions most likely to lead to a readmission are chronic obstructive pulmonary disease and bronchiectasis, often caused by smoking – 22.7% of patients with that end up back in hospital; sickle-cell anaemia (22.4%); and alcohol-related liver disease (21.4%). That shows the potential for the NHS to improve its performance by, for example, encouraging more people to give up smoking or minimise their drinking.

When a patient has had an operation, they are most likely to reappear within 28 days if they have had a kidney transplant – 27% do so – or have undergone drainage of their peritoneal cavity (25%) as part of cancer treatment. Readmission rates after a hip replacement range from 3% to 18% – a worryingly wide gap.

Penalising hospitals for preventable readmissions is growing in popularity internationally. In the US, for example, it has been decided that Medicare will not pay for preventable readmissions from 2012 for conditions such as heart failure or pneumonia.

Bad luck

The British Medical Association is concerned that Lansley's policy could lead to patients being kept in hospital longer than necessary and could prove unfair because many of the reasons patients are readmitted, such as their own behaviour, bad luck or a lack of community support with recovery, are outside of a hospital's control and unrelated to its quality of care.

"This shouldn't be a blanket policy and I suspect it won't be," says John Appleby, chief economist at the King's Fund health thinktank. "A hospital could be giving the best care in the world but would still get some readmissions." But he thinks the new approach could prove useful by stimulating hospitals to do much more to ensure their patients' follow-up care in the community is good enough, for example by liaising with GPs or even providing such primary care services themselves.

Lansley says the government will leave the exact method for determining how non-payment should occur up to health commissioners, in consultation with GPs and local authorities. "This will allow the local NHS to come up with a solution that fits its circumstances," he explains. And he disputes the Dr Foster research findings. "The calculation of an £1.5bn extra cost to the NHS lacks merit, as it is based on incorrect assumptions," he says. "In any case, no money would be taken out of the system – it would remain with commissioners and they would use it to purchase other services for patients."