The Economic & Emotional Cost of Hospital Readmissions | HealthStream

April 1, 2021
April 1, 2021

Hospital readmissions can indicate a breakdown in caregiving, whether in the act of transferring a patient from one care environment to another, or between and facility and home. In the efforts of CMS (Centers for Medicare & Medicaid Services) to control expenditures for care, readmissions are a target, because they involve a patient’s return to the most costly care possible, inpatient hospital care.

Important Things to Know About Readmissions

An earlier HealthStream blog post about readmissions shared the CMS readmission definition as someone who has been readmitted to the same or another acute care facility within 30 days of an initial hospital stay. CMS has focused its efforts on reducing readmissions multiple common conditions linked to a large majority of preventable readmissions. The same post offered that in 2015 one in five elderly patients was readmitted to the hospital within 30 days of discharge, costing Medicare some $15 billion per year. Some of the things we know about readmissions include:

  • Hospitals that staff for manageable nurse workloads have lower levels of readmissions
  • Readmissions have a negative impact on revenue, due to penalties charged by CMS and other payers.
  • Hospitals in the highest quartile for quality typically have lower readmission rates.
  • HealthStream shared in an earlier post that hospitals caring for the neediest patients are likely to pay readmission penalties. 
  • As mentioned in a previous HealthStream blog post, end of life planning has a tremendous impact on readmissions.

How to Improve Readmissions

There are definitely things hospitals can do to improve their readmissions. Here are some of things listed in a previous HealthStream post:

  • Focus on plans for discharge as soon as the patient is admitted and have everything in place before the patient leaves the hospital.
  • Practice effective good communication all around. The healthcare team must work together to address all patients’ post-discharge needs.
  • Ensure the pharmacy can provide any unusual medications needed upon discharge.
  • Facilitate prompt discharge follow-up with the primary care physician and other post-acute organizations involved.
  • Use data analysis to determine patients most at risk of readmissions, due to social determinants of health or their specific health conditions.
  • Optimize care transitions to prevent communication breakdowns that can occur during discharge planning and early recovery.
  • Improve patient engagement and education so that patients and families understand their responsibilities and role in the recovery process.

The Financial Impact of Readmissions

The cost of hospital readmissions is enormous, estimated to be in the vicinity of $26 billion annually (Wilson, 2019), so it’s no wonder Medicare is working to reduce this amount. According to the Advisory Board, “In FY 2019, 82% of hospitals in the program received readmissions penalties. While research shows national readmission rates have fallen since the program took effect, some experts note that HRRP does not count ED visits or observation stays as readmissions, and question whether readmissions actually decreased or if hospitals are avoiding admitting Medicare patients” (Advisory Board, 2019). The same article suggests that hospitals may have changed their tactics, leading to a sizeable increase in treat-and-discharge visits to the ED or observation stays, which do not count as readmissions. A study of more than three million hospital stays from 2012 to 2015 “found that the total number of 30-day return visits to the hospital—which included ED visits and observation stays—per 100,000 discharges increased by 23 visits per month” (Advisory Board, 2019), even as official readmissions decreased by 23 visits per month. This unintended consequence, of using ED visits and observation status stays, may be shifting more financial obligations to patients or at least preventing hospitals from being penalized to the same degree.

The Emotional Cost of Hospital Readmissions

When it comes to the emotional toll of readmissions, it is important to understand how rarely patients and direct caregivers have been asked about the process. One study showed that patients often felt that their readmissions were preventable and linked them to issues with “discharge timing, follow-up, home health and skilled services” (Smeraglio et al., 2019). It’s not hard to imagine the frustration that could be the result of this perceived failure. At the same time, the care providers involved failed to recognize their potential role in the readmission. The same article mentions that “review by a RN case manager found in 49% of readmissions the hospital system had some amount of opportunity to improve the discharge process. The RN case managers more often agreed with the patient’s perspective of readmission than the provider’s” (Smeraglio et al., 2019). Here again, the emotional toll of a care workplace with inadequate support and high patient volumes might cause some of the problems in discharge planning, care transitions, and patient education.


Advisory Board, “Hospitals are avoiding admitting Medicare patients to dodge financial penalties, study suggests,” advisory.com, September 5, 2019, Retrieved at https://www.advisory.com/daily-briefing/2019/09/05/readmissions.
Smeraglio, A., Heidenreich, P. A., Krishnan, G., Hopkins, J., Chen, J., & Shieh, L. (2019). “Patient vs provider perspectives of 30-day hospital readmissions.” BMJ open quality, 8(1), e000264. https://doi.org/10.1136/bmjoq-2017-000264
Wilson, L., “MA patients' readmission rates higher than traditional Medicare, study finds,” HealthcareDive, June 26, 2019, Retrieved at https://www.healthcaredive.com/news/ma-patients-readmission-rates-higher-than-traditional-medicare-study-find/557694/.


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