Medicare’s Readmissions-Reduction Program — A Positive Alternative Robert A. Berenson, M.D., Ronald A. Paulus, M.D., M.B.A., and Noah S. Kalman, B.A., March 28, 2012.

Hospital readmissions are receiving increasing attention as a largely correctable source of poor quality of care and excessive spending. According to a 2009 study, nearly 20% of Medicare beneficiaries are rehospitalized within 30 days after discharge, at an annual cost of $17 billion.1 Causes of avoidable readmissions include hospital-acquired infections and other complications; premature discharge; failure to coordinate and reconcile medications; inadequate communication among hospital personnel, patients, caregivers, and community-based clinicians; and poor planning for care transitions.

Although studies have shown that specific interventions, particularly among patients with multiple medical conditions, can reduce readmission rates by 25 to 50%,2 the Centers for Medicare and Medicaid Services (CMS) found that Medicare’s national 30-day readmission rate did not change appreciably between 2004 and 2009. Unless they are at full capacity, hospitals have no economic incentive to reduce readmissions under Medicare’s diagnosis-related group (DRG) payment approach. Read more