The High Cost of Hospital Readmissions
High Cost of Readmission

Readmissions Are Preventable

This article was written by Jim Cagliostro.
Hospital readmissions are costly but many of those readmissions are preventable. What can your hospital do to minimize the high cost of readmission?
Readmissions cost your hospital more
The facts reveal the costs:

  • Research from the Agency for Healthcare Research and Quality (AHRQ) shows that hospital readmission costs were higher than initial admission costs for about two-thirds of common diagnoses in 2016¹. The average readmission cost for any diagnosis in 2016 was $14,400.
  • This is not a recent trend. In 2011, researchers estimated that inadequate care coordination was responsible for $25 – 45 billion in wasteful spending as a result of avoidable complications and unnecessary hospital readmissions².
  • Today, one in six patients discharged from a US hospital is readmitted in under 30 days³.

If your hospital is experiencing higher than average readmission rates, it is costing you dearly to provide that care. In the current healthcare landscape, any wasteful spending can devastate a healthcare organization.
Readmissions lead to decreased reimbursement from CMS.
Since 2012, the centers for Medicare & Medicaid Services (CMS) have implemented eight value based programs in an attempt to move away from a strictly fee-for-service (FFS) model to one that promotes and incentivizes higher quality of care.
The Hospital Readmissions Reduction Program (HRRP) is one of these programs, which lowers payments to Inpatient Prospective Payment System (IPPS) hospitals with excess readmissions.
CMS is able to achieve this by:

  • Gathering comparing readmission data for a specific hospital with the average readmission rates for similar hospitals.
  • It then calculates its excess readmission rate (ERR) to determine the rate at which that hospital will be penalized (capped at a 3% reduction of the hospital’s payments from Medicare).

A report released in October 2019 found that 83% of the 3,129 hospitals evaluated under the HRRP in 2019 will receive a penalty for the fiscal year 2020⁴.
Your hospital may be one of them.
The long-term goal of the HRRP is to improve the overall health of Americans by linking hospital payment to the quality of hospital care. More specifically, it incentivizes hospitals to improve communication and care coordination surrounding a patient’s discharge to minimize the risk of unplanned readmissions within 30 days.
The particular conditions and procedures monitored in the program include:

  • Acute Myocardial Infarction (AMI)
  • Chronic Obstructive Pulmonary Disease (COPD)
  • Heart Failure (HF)
  • Pneumonia
  • Coronary Artery Bypass Graft (CABG) Surgery
  • Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty (THA/TKA)

The fairness of the HRRP has been fiercely debated and the 21st Century Cures Act was passed in 2016 as a result of concerns raised surrounding risk-adjustment.
The Cures Act divided IPPS hospitals into five peer groups so that they could be compared to other hospitals with a similar proportion of Medicare and Medicaid patients, rather than to a national average.
Some argue that the HRRP is ultimately directing funds away from hospitals that need it most- namely those serving patients in deprived areas who are more likely to be readmitted. Others have suggested that since “sicker patients are at greater risk of being admitted, the program may unintentionally discourage necessary admission resulting in preventable deaths.”
Despite the criticism, multiple studies have found that:

  • Since 2012 readmission rates have declined for conditions covered by the HRRP⁵.
  • Readmissions for targeted conditions fell significantly faster at hospitals that were subject to the HRRP than those that were not.

This data supports the claim that the HRRP is making a difference in terms of reducing readmissions and improving the quality of care for Americans.
If readmission rates are indeed declining under the HRRP, you can be sure that CMS will continue to penalize hospitals by reducing reimbursement for hospitals with above average readmission rates.
Medicare expects overall payments to hospitals will decrease by $566 million in FY 2019 due to HRRP penalties. This is an issue that is not going away and one which your hospital cannot ignore⁶.
Medicare expects overall payments to hospitals to fall by $566 million in 2019 due to HRRP penalties. Your hospital cannot ignore this issue. Click To Tweet
Readmissions can damage your hospital’s reputation
The High Cost of Hospital Readmissions
If your hospital has an above average rate of readmissions, your reputation in your community may be damaged. If patients are readmitted for reasons they believe are preventable it will impact their opinion of your organization and will decrease patient satisfaction.
Lower patient satisfaction scores lead to decreased CMS reimbursement.
Higher than average readmission rates can also smear the reputation that your hospital has among the growing number of patients who have a choice of where to receive care. Poor perception based on readmissions may drive patients to an alternative health provide the next time they need care.
Why do readmissions occur?
To reduce the number of readmissions to your hospital you must first understand the cause. These reasons include:
Patient risk factors
Some non-modifiable risk factors include age, gender, family history, and ethnicity. Other patient-centered factors that increase the risk for readmission include:

  • Specific chronic conditions
  • Multiple chronic conditions
  • Specific procedures and diagnoses
  • High-risk medications
  • Multiple medications
  • Prior hospitalization in the last 12 months
  • Lower education level
  • Lower socioeconomic status
  • Inadequate insurance coverage
  • Poor support system

Your patients must be at the center of everything you do in order to reduce hospital readmission rates. You cannot effectively address this issue without considering patient-centered factors. Some are extremely difficult if not impossible to ‘fix.’
Regardless, your hospital must plan and implement methods to decrease readmissions based on the needs of your specific patient population.
Your hospital must plan and implement methods to decrease readmissions based on the needs of your specific patient population.
There are other reasons for higher rates of readmissions on which hospitals can have a more direct impact, including (but not limited to):
Initial admission

  • Emergency department decision-making
  • Lack of appropriate care during initial hospital admission
  • Premature/Inappropriate discharge
  • Insufficient, delayed, or absent follow-up

Communication surrounding discharge

  • Poor communication with patient and support system
  • Low patient engagement
  • Poor communication with primary care providers
  • Poor discharge planning
  • Lack of clearly-defined goals
  • Time of Discharge


  • Confusion about medication (dosages and scheduling)
  • Adverse drug events
  • Availability of medication for discharge
  • Duplicate medications (e.g. patients already have generic at home)
  • Inadequate monitoring and follow-up regarding new medications

While these factors are more in the realm of the hospital’s control, it does not mean they are easily addressed.
A plan to decrease readmissions must be aimed at preventing these common pitfalls WHILE addressing the specific needs of the patient population. Click To Tweet
Any plan that fails to emphasize this two-pronged approach will fall short of the goal of minimizing readmissions.
What can your hospital do?
Non-modifiable risk factors create barriers that can never be completely eliminated, but they can be overcome. Social determinants of health (SDOH) affect a wide range of health outcomes and can be extremely difficult to change, even for a large health system with deep resources.
The aim of your organization should be to use anything it can control to have a positive impact on those things it cannot control.
With this in mind, a thorough assessment must be conducted to determine the patient population your hospital serves and the most frequent reasons for readmission. Understanding the diagnoses, chronic conditions, common medications, education level, socioeconomic status, and community resources of your patient population will prepare you to address readmissions appropriately in your specific situation.
These factors play a larger role in readmission rates than most people realize.
For instance, one study showed that the conditions associated with readmissions differed based on a patient’s type of insurance coverage⁷.

  • The type of insurance your patients have
  • The resources available in the surrounding community

will help your hospital design a plan that best suits its community.
Knowing your patient population helps direct you towards more appropriate interventions. If literacy and poverty are major issues in the community, then efforts must be made to ensure that patients fully understand their discharge instructions and can afford the necessary medications.
Initial Admission
Once a comprehensive assessment is complete, your hospital is ready to develop a plan to reduce hospital readmissions.
Identifying the root cause of every readmission must be made a priority.
These may include the following:

  • If a patient is readmitted because they are non-compliant with home medications, intervention must in some way help the patient take their medications the next time they are discharged.
  • The use of screening tools like the HOSPITAL score or the LACE index score have been successfully integrated to help hospitals across the country to reduce 30-day readmissions.
  • Evaluation of the process and the criteria used to determine if a patient should be admitted along with when they should be discharged is also essential. Your investigation may have revealed that a particular physician or group has a significantly higher readmission rate. Some practices are quicker to discharge patients, which does not present a problem unless those discharges lead to more readmissions.

Observations on the discharge process
The discharge process at many hospitals has been reduced to a relatively brief verbal exchange coupled with a stack of printed material that covers everything the hospital has not included with its discharge instructions.
This is not necessarily the fault of the clinicians who have to juggle tasks for multiple patients while trying to discharge one. It can also be the result of the patient’s desire to leave the hospital as soon as possible.
The discharge process has become an inconvenience, rather than a pivotal step in a patient’s care.
We recommend your hospital should:

  • Make the time to evaluate your discharge process.
  • Provide staffing that will take the time to review the care plan with patients and answer their questions.
  • Talk to patients and their families about any concerns they may have about post-discharge care.

Some hospitals have dedicated discharge teams or units that will review medications and instructions with patients while they wait for their transportation. This is a crucial step for the long-term health of your patients and one that can dramatically decrease the number of readmissions.
Equally as important, is the post-acute network that cares for your patient following a hospital discharge.
In so many industries, the most effective solutions require teamwork. Healthcare is no exception. Click To Tweet
Administrators and clinicians alike have a responsibility to help patients connect to the appropriate, affordable resources that will most effectively help them achieve a sustained period of good health. This will lead to a healthier community and lower readmission rates.
Most insurance companies provide case managers to help guide patients who need assistance navigating the complex healthcare landscape. Encouraging patients to call their insurance companies to find out what services are offered and covered by their plan may help keep patients healthy and out of the hospital following a discharge.
The High Cost of Hospital Readmissions
Everyone involved in the discharge process, from provider to patient, is eager to expedite the process, but it should not come at the cost of poor discharge instructions and higher readmissions rates.
Effective communication is essential to provide the best care for patients once they leave your healthcare facility. This can include the following:

  • The teach-back or “show-me” method is often used in healthcare to confirm that a patient or family member understands the information relayed to them. This method enables the provider to assess whether the patient fully understands their diagnosis and the care plan upon leaving the hospital.
  • Priority must also be given to establishing that patients and their family members are committed to the care plan. Healthcare providers must ask the appropriate questions to confirm that a patient has a sufficient support system and will be able to obtain the appropriate medications, travel to the necessary follow-up appointments, or perform the required home care. Any confusion should be addressed prior to patient discharge.
  • Communication with rehabilitation facilities and primary care physicians (PCPs) is also essential as this is often where ‘’the ball gets dropped” in healthcare, leading to potential readmissions. For example, if a patient experienced a heart arrhythmia or had a specific procedure or medication adjustment during a hospital stay, this information must be relayed to the PCP. Healthcare providers must recognize if a patient is not likely to communicate this information accurately and deliver the message themselves or provide the necessary paperwork to the appropriate providers.
  • Follow-up with patients at home should be used effectively to minimize readmissions. Phone calls, online patient portals, and reminder mailings can all be used to guide patients towards healthy decisions following an office visit, hospital stay, or procedure. Providing contact information for patients and family members to ask questions after they are discharged will undoubtedly help reduce readmissions. Telehealth is increasingly used by more organizations to provide accessible and effective follow-up to patients who live in rural areas or who have difficulty finding transportation to appointments. Telehealth can be used by all healthcare organizations to explore how improve patient care and promote healthier communities.

Medication issues are the most common reasons for readmissions.
Patients are often discharged with either new prescription medications or a change to their previous regimen, which can lead to problems for reasons including:

  • Your patient may not understand why they are taking a particular medication and may decide not to take it or may take it inappropriately.
  • There is often a lack of knowledge regarding common side effects and potential interactions with other drugs.
  • Sometimes a change in dosage or the removal of medication may lead to a patient continuing their previous regimen in error.

These and similar scenarios can increase the likelihood of medication errors, resulting in readmissions.
What can hospitals do to address these common medication issues?
A number of steps can be implemented:
Improve the communication surrounding the medication. Whenever a new medication is prescribed, healthcare providers should ensure that a patient understands the purpose of the medication, when and how to take it and if they are able to obtain the medication following discharge.
Encourage the use of in-house pharmacies with long opening hours or provide multiple doses of medications to patients prior to discharge if it is late in the day.
A 2016 survey from the American Society of Health-System Pharmacists found that 35% of US hospitals offered prescription medications to patients prior to discharge. These “meds-to-beds” programs have successfully reduced hospital readmissions and improved the quality of care and speed of recovery.
Adopting a patient-centered approach to medication management will help you to empathize with patients and assist them in the difficult task of handling their medications at home. Encourage the use of pillboxes, schedules, reminders to manage complicated medication regimens and promoting regular communication with their PCP or pharmacist about their medications. Some hospitals prioritize medication management by having pharmacists visit patients while they are in the hospital and prior to discharge to ensure a full understanding of home medications.
Keep in Mind
Perhaps the greatest pursuit your hospital can adopt to prevent readmissions is to help patients understand what aspects of their care they can control post-discharge.
The most effective step to prevent hospital readmissions is to help patients understand what aspects of their care they can control. Click To Tweet
Encouraging patients to take ownership of their health can empower them to overcome some of the obstacles they face following their discharge to home. The following may help:

  • Help connect them with resources that will promote healing and long-term health. Answer any questions and address any fears they may have when it comes to their care plan at home.
  • Communicate clearly and compassionately to help patients understand what needs to be prioritized to promote healthy living.

As healthcare organizations seek to address the growing problem of readmissions, the time and resources required can be overwhelming.
The cost of readmission is too great to let these concerns prevent your hospital from taking steps toward real change.
While some readmissions are unavoidable, many others are preventable. By making a commitment to reduce readmissions, your healthcare organization will improve the quality of care, patient satisfaction, and avoid unnecessary waste of precious resources that are needed to continue serving the health needs of your community.
A list of great resources to help hospitals improve care transitions and decrease readmission rates can be found at

Jim Cagliostro
Jim Cagliostro
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