Examining the Drivers of Readmissions and Reducing Unnecessary Readmissions for Better Patient Care PDF

This TrendWatch from September 2011 examines recent research on hospital readmissions, including the linkages between readmissions and quality of care, and the various circumstances that may drive readmissions.

Nearly one-fifth of Medicare beneficiaries—roughly 2 million beneficiaries per year1—discharged from a hospital return within 30 days, according to the Medicare Payment Advisory commission (MedPAC).2 Some of the readmissions are planned, some are unplanned and others are unrelated to initial reason the patient came to the hospital. Identifying and reducing avoidable readmissions will improve patient safety, enhance quality of care, and lower health care spending. That is why policymakers, consumers, hospital leaders and the medical community are focused increasingly on readmissions to hospitals.

Policymakers are proposing incentives to reduce hospital readmissions by publicly posting data on readmission rates and lowering payments to hospitals with high rates. First, in 2009, hospitals began voluntarily reporting hospital readmission rates to the Centers for Medicare & Medicaid Services (CMS) for public review on its website, Hospital Compare. Examining the Drivers of Readmissions and Reducing Unnecessary Readmissions for Better Patient Care Rates of readmission occurring for any reason following hospitalization for one of three common conditions—heart attack, heart failure, and pneumonia—are displayed.3 Most recently, in the Patient Protection and Affordable Care Act (ACA), Congress enacted the Hospital Readmissions Reduction Program (HRRP) under which Medicare will penalize hospitals for higher-than-expected rates of readmissions beginning in FY 2013.4

Careful planning is warranted to ensure that the HRRP achieves its dual aims of improving quality and reducing costs. There are opportunities to achieve cost savings by reducing readmissions, but not all readmissions can or should be avoided. Additionally, as CMS proceeds with the HRRP, evidence is mounting that the link between readmissions and quality of care is more complex than assumed. Further, the role of other factors—such as a patient’s demographic and socioeconomic characteristics, social support structure, and co-morbid conditions, all of which are crucial to appropriate risk adjustment of readmission rates—is still not fully understood.

America’s hospitals are committed to improving the safety and quality of care they deliver, and many are already working to reduce avoidable readmissions. Innovative programs focus on improving care transitions, bolstering postdischarge monitoring and follow-up care, and strengthening linkages with other community providers. Payment rules should encourage hospitals to invest in programs proven effective, and should avoid unintended adverse consequences for other aspects of patient care.

This TrendWatch examines recent research on hospital readmissions, including the linkages between readmissions and quality of care, and the various circumstances that may drive readmissions. It also discusses the changes put in place by the ACA and highlights the considerations and additional research that are warranted as policymakers implement the new HRRP.


1. Estimate derived from total inpatient volume (inpatient PPS discharges) obtained from Centers for Medicare & Medicaid Services. Medicare Inpatient Hospital Dashboard, Inpatient Prospective Payment System. Data updated March 2011 for discharges from 10/2006-12/2010.

2. Medicare Payment Advisory Commission. (June 2007). Payment Policy for Inpatient Readmissions. Report to the Congress: Promoting Greater Efficiency in Medicare. Washington, DC.

3. See: http://www.hospitalcompare.hhs.gov/.

4. The Affordable Care Act is the combination of the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 (HCERA), P.L. 111-152, enacted on March 30, 2010. See: Section 3025.

You can also download PowerPoint slides based on this Trendwatch.

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