Hospitals unlikely to save money by cutting readmissions

Hospital efforts to reduce readmissions might save money for Medicare or other insurers, but is currently not expected to save hospitals money according to aNew York Times article. Under the current payment system, even when hospitals find ways to greatly reduce readmissions, saving money for Medicare and other insurers, their efforts go unrewarded. Currently, insurers typically pay hospitals to treat patients — not to keep them away by keeping them healthy — and hospitals can actually lose money by providing better care.


Readmissions can be a costly side effect of poorly coordinated care. One in five Medicare patients, for example, returns to the hospital within 30 days. Over all, readmissions cost the federal government an estimated $17 billion a year.


Two Senate leaders of the effort to overhaul health care, Max Baucus, Democrat of Montana, and the Charles E. Grassley, Republican of Iowa, recently announced their support for changing the way hospitals are paid, to reward them for reducing the number of patients requiring readmission.


Click here for the full story in the New York Times.


(SOURCE: Advisory Board Daily Briefing,, May 11, 2009)