The Cost of Readmissions

The federal government has been spending $17 billion each year on hospital readmissions. Now, in light of the Affordable Care Act, it’s cracking down — on the readmissions and the expenses.

Nearly one in five Medicare patients returns to the hospital within a month, but until now, hospitals have had no incentive to make sure patients didn’t come right back. This New York Times article explains why.

“Medicare generally pays hospitals a set fee for a patient’s stay, so the shorter the stay, the more revenue a hospital can keep. Hospitals also get paid when patients return.”

Not anymore. Last month, Medicare began imposing fines against more than 2,000 hospitals that have readmitted too many patients. Some hospitals will lose as much as $2 million this year from reductions in Medicare’s payments.

The fines are intended to address a bigger issue: what happens to patients after they walk out of the hospital.

But will it work? What should hospitals do to prevent readmissions? And do the penalties address the real problem?

Share your thoughts.

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