Return-on-Investment (ROI) Analyses of an Inpatient Lay Health Worker Model on 30-Day Readmission Rates in a Rural Community Hospital

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Abstract

Purpose

The purpose of the study was to assess the return-on-investment (ROI) of an inpatient lay health worker (LHW) model in a rural Appalachian community hospital impacting 30-day readmission rates.

Methods

The Bridges to Home (BTH) study completed an evaluation in 2015 of an inpatient LHW model in a rural Kentucky hospital that demonstrated a reduction in 30-day readmission rates by 47.7% compared to a baseline period. Using the hospital's utilization and financial data, a validated ROI calculator specific to care transition programs was used to assess the ROI of the BTH model comparing 3 types of payment models including Diagnosis Related Group (DRG)-only payments, pay-for-performance (P4P) contracts, and accountable care organizations (ACOs).

Findings

The BTH program had a –$0.67 ROI if the hospital had only a DRG-based payment model. If the hospital had P4P contracts with payers and 0.1% of its annual operating revenue was at risk, the ROI increased to $7.03 for every $1 spent on the BTH program. However, if the hospital was an ACO as was the case for this study's community hospital, the ROI significantly increased to $38.48 for every $1 spent on the BTH program.

Conclusions

The BTH model showed a viable ROI to be considered by community hospitals that are part of an ACO or P4P program. A LHW care transition model may be a cost-effective alternative for impacting excess 30-day readmissions and avoiding associated penalties for hospital systems with a value-based payment model.

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