Reducing Hospital Readmissions in New York State: A Simulation Analysis of Alternative Payment Incentives

This NYHealth report uses hospital discharge data to calculate hospital readmissions rates across all payers in New York State and explores quality improvement and payment reform strategies to improve care and bring costs down.

Hospital readmissions in New York State cost $3.7 billion per year. Nearly 15% of all initial hospitals stays in the State resulted in a readmission, which translates to nearly 274,000 additional hospital stays. Many of these readmissions are a result of hospital-acquired infections, premature discharge, failures with medication management, inadequate discharge planning, or poor communication between patients and providers who are responsible for post-discharge care.

The report, prepared by Mathematica Policy Research, estimates the effects of various reimbursement strategies and provider-level interventions that are designed to reduce readmissions. While several quality-improvement interventions have been proven to be effective in reducing readmission rates, relatively few hospitals have adopted these programs, in large part because the financial incentives to do so are not currently in place. The report also explores an alternative direct payment model that could be more effective than current strategies to reduce readmissions.