Reducing readmissions may reduce hospital revenue

Hospitals that are successful at reducing readmissions may actually lose revenue, according to an article in HealthLeaders Media. 

According to the article, a pilot program at Children’s Hospital in Boston aimed at reducing asthma related readmissions is a quality success, reducing emergency room visits by 62%, and hospitalizations are by 82%.   

The program also saves money, but the savings are for the payers, not the hospital. The hospital, and many other hospitals that are aiming to reduce readmissions, actually loses money on the program as it costs money to fund the program, and there are deep losses from the reduction in hospital visits.  

Children’s Hospital maintains that the current financing system for health care in this country doesn't support these kinds of programs. Massachusetts lawmakers have passed legislation calling on the state to develop a bundled or global payment system for Medicaid patients with high-risk pediatric asthma.

(Sources: The Advisory Board Daily Briefing,, February 14, 2011; HealthLeaders Media,, February 10, 2011)