The Hidden Costs Behind Excess Hospital Readmissions

By Vicky Mahn-DiNicola

Though the intent of every healthcare organization is to make patients better, new numbers show that nearly one in 10 hospital patients will become sick or harmed while under hospital care – resulting in greater risk and potential complications, and unnecessary hospital readmissions. Not only are unnecessary hospital readmissions traumatic to patients but they have huge financial implications too.

Vicky A. Mahn-DiNicola RN, MS, CPHQ, Vice President of Research & Market Insights at Midas+, A Xerox Company
“Reducing readmissions not only generates cost savings for hospitals, it improves clinical outcomes for patients.” — Vicky Mahn-DiNicola, vice president of Research and Market Insights for Midas+, A Xerox Company.

While new estimates suggest that readmission rates have dropped to 17 percent since 2010 – more progress remains. The Hospital Readmissions Reduction Program at the U.S. Centers for Medicare and Medicaid Services (CMS) – tasked with improving patient safety and quality care – requires CMS to reduce payments to hospitals with excess readmissions. In addition to this, Becker’s Hospital Review says CMS will fine hospitals with high readmission rates an estimated total of $428 million in fiscal year 2015, up from $227 million in FY 2014.

The good news is MedPac’s June 2013 report to congress indicates that readmission rates for the three reported conditions of heart attacks, heart failure and pneumonia had a larger decrease in readmissions over a three year measurement period than for all conditions. These results suggest a strong link between public reporting and the Hospital Readmission Reduction Program – what gets measured gets managed. New tools in health IT have stepped up to help deliver technologies and workflow solutions that address care transitions, such as remote patient monitoring and electronic data sharing.

Reducing readmissions generates huge cost savings for patients and hospitals alike. So how are hospitals avoiding readmissions?  By improving care transitions, especially for the most vulnerable in our society.

Here are a few ways hospitals are helping people transition out of the hospital more successfully.

  • New IT tools deliver workflow solutions that address care transitions, such as remote patient monitoring and electronic data sharing. These tools offer proactive to solutions to help heath care organizations prevent hospital acquired infections and identify patients at high risk for readmission.
  • Providers focus on planning patient discharge, and coordinate and schedule follow up appointments prior to discharge.
  • Home health care services within 3 days after discharge from the hospital is a low cost and effective way to improve a patient’s care transition. (Per
  • Early follow-up with specialty clinics that manage high risk diseases can help improve care transition by providing early detection and intervention of symptoms.
  • Extending inpatient stays by 1-2 extra days can significantly reduce readmissions, save costs and — more importantly – save patient’s lives, according to a study by the Columbia Business School.

To avoid penalty, hospitals must prevent excessive readmissions in six clinical areas for Medicare patients discharged from July 2012 through June 2015. New tools have been designed to help offset financial implications for healthcare providers too.

Midas+, A Xerox Company, has developed a data-driven solution that predicts a hospital’s excess readmissions ratio for each of the six clinical areas – two years out – and estimates what this will cost in financial penalties. The solution also provides consultation for hospitals to respond to areas of concern and implement targeted improvement strategies.

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  1. Sethi January 16, 2015 - Reply

    will like to introduce this in India . Contact me

    • Gregory Pings January 19, 2015 - Reply

      Sethi, thank you for your interest. Vicky Mahn-DiNicola will contact you at the email address you provided.



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