Readmission costs even higher than suspected

Systemic reforms needed


WASHINGTON – A new study on the cost of hospital readmissions finds that about 1 in 12 adults discharged from a hospital is readmitted within 30 days, adding $16 billion to the cost of healthcare in the United States, and, according to analysts, it underscores the need for a comprehensive approach to reforms.

The study, authored by Anna Sommers and Peter J. Cunningham for the National Institute for Health Care Reform, said the costs of readmission grow to $97 billion annually when including those patients readmitted within one year.

The costs have caught the attention of policy makers, as Medicare prepares to penalize hospitals deemed to have high rates of avoidable readmissions. The move, which private insurers are also considering, is intended to push hospitals to better ensure patients get the care they need after they are released.

But, the study finds, readmissions are not brought on simply by a lack of follow-up care for a recurring heart ailment or a fractured hip not healing properly.

“Many of the conditions for which adults are readmitted are not related to the first hospitalization,” Sommers noted. “One-quarter of all readmissions within 30 days (are) unrelated by condition. Almost 40 percent of (readmissions) out to one year after discharge are unrelated. When hospitals and health plans focus on preventing readmissions for just one condition, an opportunity to lower costs is missed.”

Nancy Foster of the American Hospital Association said hospitals are working on ways to better communicate with patients and to work more closely with healthcare providers in patients’ communities. But those initiatives assume a next level of care. As the study documents, most readmitted patients either don’t access proper follow-up care, or they don’t have access to it.

“There’s a system flaw here,” Foster said.” We need to think more broadly about how we can fill this gap.”

“This is a very, very complex issue. I don’t think we can make it simple in any way,” said Sandy Reed, a vice president with the healthcare consulting firm B.E. Smith. “It crosses the financial and operational dimensions of an organization.”

Reed cites Memorial Hermann Healthcare System in Texas as an example of how organizations might structure a strategy to tackle the issue. Groups cutting readmissions, Reed said, have focused on five tactics: Understanding their patient population; focusing on prevention and planning at admission; educating patients and family throughout the hospital stay; ensuring appropriate handoff after discharge; and working on patient accountability.

It’s a challenge, Reed said, that requires direction from the very top of an organization.

“As a leader, you have to figure out how to rally resources around the true issue,” Reed said. “It’s not a matter of getting money to pay for it, it’s figuring out how your organization strategically can be more effective in doing these things. Frankly, organizations not meeting their readmission rates, their Medicare funding is going to go down. We’ve got to figure out how to fix it.”

The study, “Physician Visits After Hospital Discharge: Implications for Reducing Readmissions,” is available online at

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