Reducing Readmission Rates in Healthcare

April 1, 2021
April 1, 2021

Understanding the Readmission Definition

The readmission definition, according to CMS, applies to someone who has been readmitted to the same or another acute care facility within 30 days of an initial hospital stay. Today in the U.S. today, one in five elderly patients is readmitted to the hospital within 30 days of discharge, costing Medicare some $15 billion per year (Kowalski, 2015). However, readmission rates vary greatly by hospital and by state, providing us with an indication that we might have the opportunity to reduce rates by improving hospital processes. Hospital readmission costs are significant. As required under the Affordable Care Act, CMS began imposing a penalty on hospitals with excessive Medicare readmissions in FY2013 (October 1, 2012) as part of the Hospital Readmissions Reduction Program (HRRP).  There are a number of known factors such as socio-demographic status and healthcare history that place someone at high-risk for a hospital readmission. As might be expected, frail, elderly, and lower income patients who lack support at home are at highest risk. The American Hospital Association recently conducted an analysis looking at how HRRP penalties varied by hospitals’ Disproportionate Patient Percentage (DPP). They concluded that hospitals with a high percentage of needy patients were not only much more likely to be penalized but also more likely to pay a higher penalty. 

The Impact of Reducing Readmissions on Staff

The campaign to reduce hospital readmissions has changed how many healthcare organizations are looking at staffing, especially when it comes to the ratio of nurses to patients. According to an article in Healthcare Business & Technology, a study by the University of Pennsylvania found that “hospitals that staff for manageable nurse workloads have lower readmission rates. The study matched 2,826 hospitals based on the number of hospital beds. The study compared HRRP penalties between the 1,413 well-staffed hospitals and the 1,413 similar hospitals with lower staffing levels. The study concluded that closely matched hospitals based on the same patient population characteristics, still differ in HRRP penalties due to the level of registered nurse staffing. The 1,413 hospitals with low nurse staffing were significantly more likely to receive an HRRP penalty compared to the 1,413 well-staffed hospitals” (Healthcare Business & Technology, 2018).

The Impact of Reducing Readmissions on Revenue

Readmissions are expensive for CMS and for the hospitals where they occur. For example, “Hospital readmissions cost Medicare about $26 billion annually, with about $17 billion spent on avoidable hospital trips after discharge, according to data from the Center for Health Information and Analysis” (Lapointe, 2018). When the impacts are measured for hospitals, hospital readmission costs are dramatic, even as the program realizes some measure of success. According to one article, “Decreasing hospital readmission rates through the program came at a price for some hospitals. CMS penalized over 2,500 hospitals by more than $564 million in 2017 for excessive 30-day hospital readmission rates. And Medicare isn’t the only payer pressuring providers to prevent hospital readmissions. Readmissions of privately insured and Medicaid beneficiaries cost $8.1 billion and $7.6 billion, respectively, AHRQ found” (Lapointe, 2018).

The Impact of Reducing Hospital Readmissions on Care Quality

Fierce Healthcare cites a 2017 study published in the New England Journal of Medicine that looked at the connection between high-quality care and lower readmission rates. Researchers found that “Hospitals in the highest performance quartile for quality had significantly lower 30-day readmission rates than those in the lowest quartile. The lowest performers had a readmission rate of about 25%, while the highest performers had a readmission rate of about 23%” (Minemyer, 2017). While 2% may not seem like much, researchers offered “that for every 50 patients who are admitted to a hospital in the lowest-performing quartile rather than in the highest-performing quartile, there is one additional readmission” (Minemyer, 2017).

Key Steps to Take to Reduce Readmissions

A previous HealthStream blog post discussed multiple steps hospitals should be taking to prevent and reduce hospital readmissions:

  1. Focus on plans for discharge as soon as the patient is admitted. You can’t wait until the day before. You need to try to have everything in place before the patient leaves the hospital.

  2. There also needs to be good communication all around. Physicians, nurses, case managers, social workers, therapists, family members, and the patient all need to work together during the patient stay to address all of the patient’s post-discharge needs.

  3. Contact the pharmacy department to make sure they can support any unusual medications that the patient might need upon discharge.

  4. Ensure that there is prompt discharge follow-up with the primary care physician and other post-acute organizations that might be involved. We know there is a strong relationship with how soon the patient sees their primary care physician and hospital readmission rates.

Additional measures that may prove beneficial in reducing hospital readmissions are:

  • Identifying the Root Cause of a Readmission, then using data analysis to determine which patients are most at risk, due to social determinants of health or their specific health conditions.

  • Optimizing care transitions to prevent communication breakdowns that can occur during discharge planning and early recovery.

  • Improving patient engagement and education so that patients and families understand their responsibilities and role in the recovery process. (Lapointe, 2018)



Healthcare Business & Technology, “Low nurse staffing may cost your facility millions of dollars,” January 2, 2018, Retrieved at http://www.healthcarebusinesstech.com/low-nurse-staffing-may-cost-your-facility-millions-of-dollars/.

Kowalski, Cyndy. “Readmission Reduction:  A look at strategies for lowering hospital readmissions across the continuum of care,” Besler Consulting, www.besler.com, p. 5, January 2015.

Lapointe, Jacqueline, “3 Strategies to Reduce Hospital Readmission Rates, Costs,” Rev Cycle Intelligence, January 8, 2018, Retrieved at https://revcycleintelligence.com/news/3-strategies-to-reduce-hospital-readmission-rates-costs.

Minemyer, Paige, “Data shows link between hospital quality and readmission rates,” Fierce Healthcare, September 14, 2017, Retrieved at https://www.fiercehealthcare.com/finance/hospital-quality-impacts-readmission-rates-study-finds.


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