Reducing Hospital Readmissions

Hospital readmissions cost Medicare more than $26 billion annually, $17 billion of which is avoidable, meaning it would not be necessary if patients received the right care. Many patients are readmitted simply because they live in an area where the hospital is used more frequently as a site of care for illness. The root cause and mitigation of this problem goes far beyond hospital walls.

Reducing Hospital Readmissions: Solutions in Action

The Centers for Medicare and Medicaid Services (CMS) has instituted escalating penalties for hospitals with higher than expected readmissions and reducing readmissions has become a focal point of healthcare reform, mainly through value-based payment and the advent of population health management and continuum of care initiatives.

Starting in fiscal year 2013, CMS withheld 1 percent of its payments for approximately 5,000 acute care hospitals. And by 2017, this reimbursement reduction will increase to 2 percent. In the first year alone, this 1 percent equated to about $850 million dollars for all U.S. hospitals. In order to gain back a portion of the 1 percent funds withheld, a hospital will have to earn points for either achieving the high performer results on Clinical Process of Care and Patient Experience of Care measures against national competitors or by showing improvement from its baseline score. This is now a major financial issue for U.S. hospitals that they must address in a comprehensive and proactive way, or face the consequences to their bottom line.

In this briefing we examine:

  • Challenges that impact readmissions
  • Risk factors for readmissions
  • Government and private initiatives to reduce readmissions
  • Resources and best practice case studies that have been successful
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