Medicare's Readmissions-Reduction Program — A Positive Alternative

The Affordable Care Act's financial penalty for “excessive” readmissions may be too weak to overcome the substantial counterincentives currently at work. But a “warranty” payment would provide a stronger business case for hospitals to get with the program. 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 . . .