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Pennsylvania Heart Failure Patients – $1 Billion a Year and Counting

Harrisburg, PA – August 7, 2018 – According to a research brief released today by the Pennsylvania Health Care Cost Containment Council (PHC4), Medicare pays almost $1 billion ($920 million) to cover annual healthcare costs for heart failure patients in Pennsylvania—and that amount reflects costs for Medicare fee-for-service patients only (about 45% of all adult patients hospitalized for heart failure during the study period).

The goal of the study was to analyze one-year “episodes of care” for heart failure patients. In doing so, PHC4 examined Medicare fee-for-service payments for 15,070 adult beneficiaries hospitalized specifically for heart failure and identified the various health care encounters they experienced within a year.

“Understanding the various health care needs of heart failure patients, along with the cost of that care, provides opportunities to evaluate how that care is delivered, improve coordination of care, and examine different payment models,” said Joe Martin, PHC4’s Executive Director. “Looking at episodes of care is a step forward in understanding the patient’s experience,” added Martin.

According to the brief, payments for health care services included:

  • $498.9 million for hospital-related services, including the initial hospital stay as well as readmissions.
  • $117.9 million for skilled nursing care.
  • $96.9 million for physician or other health care provider services.
  • $84.9 million for outpatient services, including emergency department visits and outpatient rehabilitation.
  • $44.3 million for prescription drugs.
  • $40.8 million for home health services.
  • $25.3 million for hospice services.
  • $11.2 million for durable medical equipment.

County-level population-based rates are also included in the brief.

At almost $500 million, costs for hospital-related services are particularly noteworthy since hospitalizations for heart failure are often considered avoidable with effective primary or preventive care. Using a set of Prevention Quality Indicators developed by the Agency for Healthcare Research and Quality, PHC4 recently reported that, statewide, heart failure patients spent more than 250,000 days in the hospital (state fiscal year 2017 data)—hospital days that might have been prevented.

Given the prevalence and costs associated with heart failure, PHC4 routinely examines heart failure hospitalizations through its Hospital Performance Report—and noted decreases in mortality, readmissions, and the number of hospitalizations statewide in the most recent edition.

Heart failure is the inability of the heart to pump enough blood to meet the needs of the body, which leads to shortness of breath and swelling of the legs from fluid build-up in the lungs. In all, there were 33,421 Pennsylvania adult residents hospitalized for heart failure during the study period. Most heart failure patients, more than 80%, were aged 65 and older. The analysis relied on data from the Centers for Medicare and Medicaid Services, so the time period studied was dependent on the most recent data available to PHC4 at the time the project began, which spanned federal fiscal years (FFY) 2014 and 2015.

The brief is available on PHC4’s website at You can also link to it through social media on Facebook and Twitter.

PHC4 is an independent state agency charged with collecting, analyzing and reporting information that can be used to improve the quality and restrain the cost of health care in Pennsylvania.

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