Readmissions more than double the cost of care

Episodes of care involving one readmission cost about $33,000

A new analysis commissioned by the Alliance for Home Health Quality and Innovation (AHHQI) finds that hospital readmissions more than double the cost of providing care to a patient, and those readmissions become more likely when a patient suffers a chronic condition. 

For the analysis, researchers reviewed all Medicare Part A and Part B claims for 5% of beneficiaries between 2007 and 2009. They assessed all episodes of care across various care settings, including hospitals and home health care providers.

Altogether, analysts determined that 22.4% of all episodes of care for Medicare beneficiaries resulted in a readmission. Specifically, they determined that 77.6% of hospital episodes of care contained no readmissions, while 17.4% contained one readmission and 5% contained two or more readmissions.

According to the analysis, Medicare paid an average of:

  • $33,000 for Medicare patients who were readmitted one time; and
  • $15,000 for Medicare patients who were not readmitted.

The analysis found that a patient's readmission risk increases with the number of chronic conditions, and the severity of a patient's chronic condition increases the cost of care. For instance, patients with arthritis were readmitted following an episode of care about 13.5% of the time, while patients with chronic heart failure were readmitted 33.3% of the time.   

"With clinically appropriate and effective care, patients have the potential to avoid some unnecessary admissions altogether, ultimately saving Medicare and taxpayers a significant amount," says AHHQI Executive Director Teresa Lee.

She notes that "[h]ome health care combines the right mix of care management, prevention training, and close observation to significantly reduce hospital admissions" (Kutscher, Modern Healthcare, 7/23 [subscription required]; AHHQI fact sheet, 7/18; AHHQI report, 7/18).


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