The Cost Of a US Hospital Readmission

Analysis by Gregory Johnson

SpeechMED | 1.15.17

Size of ProblemOne big problem in healthcare is the rising cost of patient readmission.

$528 Million DollarsPenalty Fees in 2016

Source: Kaiser Health News

What is a Hospital Readmission?“A readmission is an inpatient stay that begins within 30 days of the discharge. Date of an

index admission and can be to the same or a different hospital. The readmission. Can be for

any cause and may or may not be related to the care received at the index admission. No

more than one readmission is counted within the 30-day period.”

Source: CMS.gov

What is a Hospital Readmission?When a hospital discharges a patient they give them discharge instructions to assist with their

care. If a discharged patient has to be admitted back into a hospital within 30 days, based on

percentages the hospital facility can potentially be fined by the Center for Medicare and

Medicaid Services (CMS).

The Average Cost of Readmission in 2013One of the key metrics of measuring a hospital’s success

in delivering quality care is the readmission rate. In a

study by the AQHR, they estimate that the average cost

of a readmission.

Medicare = $13,800

Medicaid = $12,300

Uninsured = $10,100

Private Insurer = $14,200

Source: Agency for Quality Health and Research

The Average Cost of Readmission in 2013Let's take a sample of Medicare data on inpatient discharges

in 2011. At the range of 0-70 discharges, we have 9,154

discharges in FL providers. Assuming 20% of the discharges

led to readmission that would be 1,831 patients who had to

return to the hospital.

Collectively these hospitals would penalty fees surpassing

$25 million. The total amount of discharges in the fiscal year

of 2011 was 540,447 discharges. If we can use the same 20%

of patients likely to get readmitted we would get a total

penalty cost to all FL providers of $1.5 Billion dollars.

Source: CMS.gov

Analyzing Florida Discharge Data In Miami-Dade County, one of the big hospitals is Jackson Memorial Hospital. According to

the American Hospital Directory, they have 49,177 discharges in a month.

If we assume 20% readmissions out of that total with $13,800 as the set penalty fee (it could

be higher because they are a lot of seniors in Miami). That would mean Jackson could be

facing up to $137 million in penalty fees. With a total patient revenue of $4.5 billion that could

lead to a 3% loss for the hospital.

Follow us @ SpeechMED

Questions? Email me at GJohnson@SpeechMED.com

SpeechMED | 1.15.17