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4 Reasons Why a Hospital Readmission Rate Matters

Research shows many hospital readmissions can be avoided. Yet, in 2022, about 75% of hospitals still incurred readmission penalties, with penalties leading to Medicare reimbursement cuts as high as 3% for each patient.

Readmission metrics are often key indicators of a hospital's or health system's standard of care. They are a way to monitor, measure, and flag compliance issues with poor care decisions during admittance, safety protocols during the delivery of treatment, and the likelihood of inadequate post-care instructions, recommendations, and medication management, the latter of which can include medication reconciliation post-discharge (MRP). 

Understanding readmission rates and the factors influencing them provides a basis for achieving better health outcomes as facilities can better determine where it needs improvement. There is a correlation between readmissions, adverse health outcomes, and a waste of hospital resources, with readmission rates significantly influencing a hospital's quality scores and performance. Accordingly, reducing hospital readmission rates are increasingly crucial for hospitals and their leadership.

What Is a Hospital Readmission Rate and How Is It Measured? 

A hospital readmission rate is the number of patients who must be hospitalized again within 30 days after their initial discharge. It’s a performance metric that tracks how many patients must return to the hospital due to complications from their previous visit and initial chief complaint. When calculating the rate of readmissions, the complete count of readmissions within a 30-day period is divided by the count of index hospital stays which are documented as inpatient admissions based on a patient's original diagnosis. 

Why a Hospital Readmission Rate Matters

Simply put, hospital readmission rates are one of the top performance and quality measures for evaluating a hospital's delivery of care, and that’s why it’s essential for leadership to monitor them. Poor hospital readmission rates can lead to various negative impacts on a hospital, including decreased revenue — from penalties incurred and/or diminished bed capacity. High readmission rates also introduce other unwelcome effects, such as increases in the overall cost of care, negative perception of the hospital by consumers and payers because of quality ratings based on the provider’s publicly reported scores, and even staff dissatisfaction with needing to further provide care to the same patient.

Let's examine further four top reasons why hospital admission rates matter and why leadership cannot afford to ignore them.

1. Hospital Readmission Penalties Negatively Affect Hospital Revenue and Operations

The Kaiser Family Foundation reports that in 2022, there were 58.6 million Medicare beneficiaries, and more than 20% of hospital revenue typically comes from Medicare spending and reimbursements. Poor readmission rates can cut into this revenue. Hospital readmission penalties have been issued nationwide, often reflecting monetary losses. Medicare readmission penalties usually cause a substantial decrease in reimbursements, with some hospitals losing 3% of their Medicare payments. 

During the 2022 fiscal year alone, Medicare cut payments to more than 750 hospitals, and nearly 2,300 sites were generally penalized. These facilities that experienced Medicare readmission penalties showed the highest numbers of patient infections and injuries, further pointing to the importance of limiting rehospitalization rates.

2. Preventable Hospital Readmissions May Lead to Higher Mortality Rates 

Not surprisingly, research shows that an increase in readmissions can also result in an increase in mortality rates. A study reviewing readmission and mortality rates of patients with heart failure exacerbation and atrial fibrillation, published in the International Journal of Heart Failure, found that the mortality rate increased from 7.28% to 8.12% for those patients who were readmitted. Furthermore, the financial burden for readmission during the year examined exceeded $450 million.

Another study published in Cureus concluded that 30-day readmissions are an independent risk factor for all-cause mortality which persists for at least two years independent of diagnostic group and severity index.

3. Potential Risk of Experiencing a Redirection or Shift in Patients Regardless of Bed Availability 

A reputation as a "high-readmission hospital" can have profound internal and external implications. A bad reputation can severely limit growth and revenue opportunities for the hospital, damage employee retention, and shift patients' perception of the quality of care. 

By executing a successful, comprehensive hospital readmission reduction strategy, organizations can help keep beds open for those who need them rather than for those who have been admitted with preventable complications. Reducing readmissions is a way to preserve and allocate hospital resources more efficiently. Poor readmission rates increase the risk of potential patients in your community diverting to other facilities.

4. Overall Cost and Quality of Care Is Affected 

Hospital readmissions can cost upwards of billions every year. In 2018, the Agency for Healthcare Quality and Research reported that there were 3.8 million 30-day all-cause adult hospital readmissions, with a 14% readmission rate and an average readmission cost of $15,200. 

Due to poor care and high rehospitalization rates, both the hospital and the affected patient will experience some form of penalty. As nearly 20% of Medicare patients are rehospitalized within 30 days of discharge, minimizing post-discharge adverse events has become a growing priority for our healthcare system. 

Hospital administrators are taking notice of the importance of readmission rate reduction practices and seeking better solutions to maintain those reductions. Cost and care correlate with readmission rates. Reducing readmissions has become a tactic that can boost value-based care participation and performance. Many hospitals are looking to better their performance concerning medication reconciliation, medication management, and post-discharge adherence (including MRP) as key areas of focus to help tackle the issue of a high readmission rate.

A Key Solution to Hospital Readmission Reduction: Improved Medication Management 

Preventable readmissions are a costly challenge for hospitals and health systems, on top of being an unnecessary risk to patient health. A fundamental foundation of many hospital programs aimed at readmission reduction is improving medication management. Comprehensive medication management services provided by Cureatr have these and other significant measured results:

  • 22% relative reduction in 30-day all-cause readmission rate
  • 4 & 5 Star medication reconciliation completion performance
  • 9.3% increase in patient adherence to maintenance medications

Learn more about how Cureatr combines software and human interaction to improve medication management and bring about improvements that drive down readmissions and drive up quality rankings.

Improving Patient Care and Quality Ratings With Medication Management


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