MHA FPX 5014 Assessment 3 Cost-Benefit Analysis for Transitional Management Care

MHA FPX 5014 Assessment 3 Cost-Benefit Analysis for Transitional Management Care

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Capella University

MHA-FPX 5014 Health Care Quality, Risk, and Regulatory Compliance

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Date

Abstract

Transitional Care Management (TCM) pertains to the process of transitioning patients from hospital discharge to ongoing care within the community. This study aims to conduct a cost-benefit analysis (CBA) to evaluate the costs and benefits associated with the TCM program, focusing on its benefit-to-risk ratio. The advantages and objectives of TCM in a hospital context include reducing patient readmissions, enhancing the quality of care outside the hospital, ensuring continuity of care, and promoting long-term health for discharged patients (Elsener et al., 2023). The CBA will assist in determining the cost-effectiveness of TCM by identifying anticipated costs over a five-year period and comparing them with projected benefits, thereby facilitating informed decision-making (Elsener et al., 2023).

Keywords: Transitional Care Management, Cost-Benefit Analysis, Continuity of Care, Readmissions, Centers for Medicare and Medicaid Services

Focus of Stakeholders for a Cost-Benefit Analysis

Identifying stakeholders involved in TCM within a hospital setting is essential. Key stakeholders include patients, their caregivers, and the hospital responsible for discharging the patient. External stakeholders consist of pharmacists, transitional care center management, payors, and community service agencies. The hospital and these stakeholders aim to evaluate how the implementation of TCM will benefit patients upon discharge and reduce readmissions in relation to the program’s costs over five years.

Patients discharged under TCM will have designated caregivers or facilities to ensure seamless care and continuity of treatment. Once in the community, external medical professionals will oversee patients to bridge the gap between inpatient and outpatient services. Furthermore, hospitals that adopt TCM can benefit financially from the Centers for Medicare and Medicaid Services (CMS) Hospital Readmission Reduction Program (HRRP), which incentivizes hospitals to reduce readmissions within 30 days of discharge (CMS, 2021).

Value Proposition for Change Management

Implementing change in healthcare organizations often presents challenges that require systematic strategies for effective transitions. Change management is critical for the successful implementation of TCM, as it represents a new approach for healthcare organizations, providers, patients, and staff. Effective change management necessitates administrative, financial, and provider support, as well as team collaboration. It ensures a smooth transition for patients, caregivers, team members, and healthcare providers during the TCM implementation process.

Through community partnerships, change management in TCM will emphasize the program’s benefits (Nathan et al., 2021). A well-executed change initiative will enhance the quality of patient care and satisfaction during hospital stays and upon discharge for both short-term and long-term care. Neglecting change management can lead to prolonged transition times, increased long-term patient care costs, and suboptimal care, resulting in higher readmission rates. Mitigated risks include lower mortality and infection rates, fewer emergency room visits, and reduced readmissions. Additionally, TCM will lower costs by decreasing readmissions and improving financial incentives under the CMS HRRP program (Nathan et al., 2021).

Strategies to Influence and Impact Changes for Quality Improvement

Research indicates that poor communication and coordination significantly contribute to preventable hospital admissions and readmissions. Hospitals lacking TCM models often experience higher rates of readmissions, mortality, infections, and long-term illnesses due to inadequate patient coordination upon discharge. The absence of TCM also suggests insufficient patient education, self-care, family involvement, and communication with external caregivers (Racheal & Shen, 2023).

The success of TCM relies on strong leadership and support. Active leaders provide oversight and direction, ensuring strategic momentum and accountability during TCM implementation. Key strategies for quality improvement within the TCM model include robust internal and external communication and coordination, guided by strong leadership. Follow-up care within 14 days of discharge is crucial to ensure proper patient care. Furthermore, fostering a culture of safety and continuous improvement is vital when implementing TCM (Hughes, 2008).

Cost-Benefit Analysis and Assumptions

A cost-benefit analysis (CBA) is necessary to project the costs associated with implementing a TCM program. Given that TCM is a service-based care model, predicting the return on investment (ROI) can be challenging. Research highlights the immediate benefits and potential cost savings of TCM, such as fewer readmissions within 30 days of discharge, higher patient satisfaction, improved communication, and enhanced continuity of care.

The estimated first-year cost of initiating TCM is $774,688. This figure includes leasing 1,000 square feet of clinical and office space, staffing four full-time Certified Family Nurse Practitioners (CFNPs), hiring non-clinical staff for administrative tasks, and utilizing the EPIC electronic health record system. Additional costs encompass consulting fees for a pharmacist and MD/director oversight, as well as office supplies. Over five years, the total cost is projected to be $4,613,707.92. The revenue generated from the TCM program in one year is estimated at $5,086,144.40, with a five-year future valuation of $5,083,156.44. The total five-year profit is projected to be $29,051,622.13 (Pedrosa et al., 2022).

Internal and External Benchmarks

Benchmarking plays a crucial role in healthcare by enabling the analysis of income and costs while identifying areas for improvement. It involves adopting best practices at the lowest possible costs from a systems-based perspective (SBP). Continuous quality improvement (CQI) necessitates the measurement of quality indicators, performance, and collaboration among stakeholders. In the context of Transitional Care Management (TCM), benchmarking involves comparing data to effectively reduce 30-day hospital readmission rates.

The Centers for Medicare and Medicaid Services (CMS) TCM initiative is designed to enhance patient safety, improve health outcomes, and minimize unnecessary costs. The TCM program allows hospitals to document post-acute conditions within 30 days of patient discharge and monitor patient satisfaction levels. By implementing TCM, hospitals can reduce penalties by 50%, which in turn increases hospital revenue. Enhanced benchmarks include improved patient quality measures, a decrease in hospital-acquired conditions (HACs) and healthcare-associated infections (HAIs), and the promotion of value-based care incentives (Marques et al., 2023).

Conclusion

Recent research indicates that one in five Medicare patients is readmitted to the hospital within 30 days of discharge, resulting in costs approaching $26 billion annually. The implementation of a TCM program not only improves public relations but also necessitates buy-in from stakeholders both internally and externally. Effective collaboration between internal staff and external caregivers is essential for ensuring better patient safety, satisfaction, and outcomes that extend beyond the initial 30-day period.

References

AAPC. (2022). CPT® code 99496 – Transitional Care Evaluation and Management Services – codify by AAPC. Retrieved April 12, 2022, from https://www.aapc.com/codes/cpt-codes/99496

CMS.gov. (2021, July). Transitional Care Management Services. CMS.gov Medicare Learning Network. Retrieved February 18, 2022, from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/Transitional-Care-Management-Services-Fact-Sheet-ICN908628.pdf

Elsener, M., Santana Felipes, R., Sege, J., Harmon, P., & Jafri, F. N. (2023). Telehealth-based transitional care management programme to improve access to care. BMJ Open Quality, 12(4). https://doi.org/10.1136/bmjoq-2023-002495

MHA FPX 5014 Assessment 3 Cost-Benefit Analysis for Transitional Management Car

Hughes, R.G. (2008). Tools and Strategies for Quality Improvement and Patient Safety. In R.G. Hughes (Ed.), Patient Safety and Quality: An Evidence-Based Handbook for Nurses. Agency for Healthcare Research and Quality (US). Retrieved from https://www.ncbi.nlm.nih.gov/books/NBK2682/

Jessica, R., Racheal, E., & Shen, W. (2023). Building a Financially Sustainable Transitional Care Management Workflow. Family Practice Management, 30(1), 18. Retrieved from http://library.capella.edu/login?qurl=https%3A%2F%2Fwww.proquest.com%2Fscholarly-journals%2Fbuilding-financially-sustainable-transitional%2Fdocview%2F2762856837%2Fse-2%3Faccountid%3D27965

Marques, E. A., De Gendt, S., Pourtois, G., & van Setten, M.J. (2023). Benchmarking First-Principles Reaction Equilibrium Composition Prediction. Molecules, 28(9), 3649. https://doi.org/10.3390/molecules28093649

Nathan, A. S., Martinez, J. R., Giri, J., & Navathe, A. S. (2021). Observational study assessing changes in timing of readmissions around postdischarge day 30 associated with the introduction of the Hospital Readmissions Reduction Program. BMJ Quality & Safety, 30(6), 493-499. https://doi.org/10.1136/bmjqs-2019-010780

Pedrosa, R., Ferreira, Ó., & Baixinho, C. L. (2022). Rehabilitation Nurse’s Perspective on Transitional Care: An Online Focus Group. Journal of Personalized Medicine, 12(4), 582. https://doi.org/10.3390/jpm12040582

Appendix

Costs

The table below presents a comprehensive breakdown of costs for the current year, along with projections for the next five years. The categories include hospital TCM outpatient space, EMR provider contracting, clinical and non-clinical support staff, office supplies and IT support, pharmacist consultant, and MD/director leadership. Each category’s cost is detailed per year, along with the total future and present value costs.

Benefits

The table below outlines the projected benefits for the current year and the next five years. The benefits are categorized under HRRP 50% cost reduction, CPT 99495 (Moderate Complexity), and CPT 99496 (High Complexity). The total future and present value benefits are also calculated for each year.

Present Value Discount Rate

Net Benefit

The overall net benefit is calculated by comparing the present value of the costs and benefits over the specified period.