Mathematica Policy Reseach, Inc.

Hospital readmissions—patients returning to the hospital within 30 days of an initial hospital stay—cost Medicare $15 billion a year.

Nearly one in five Medicare patients is readmitted within 30 days, and similar ratios persist for privately insured patients. Reducing the rate of hospital readmissions has great potential to reduce health care costs and improve the quality of health care in New York State, as its residents use nearly 50% more hospital days than the national average. With support from NYHealth, Mathematica Policy Research (Mathematica) estimated the cost of readmissions and the impact of clinical and payment interventions on the rate and cost of readmissions.

Spending on inpatient hospital care makes up the largest portion of health care spending in New York State, and hospital readmissions are a major driver of these high costs. To successfully reduce these costs, New York State must identify where and when avoidable hospital readmissions occur. With NYHealth support, Mathematica Policy Research (MPR) will conduct a comprehensive analysis of individual hospital readmission rates in New York State to identify opportunities for savings and reform and calculate the potential impact of specific strategies on hospital readmission rates and spending.

New York State residents use nearly 50% more hospital days than the national average, suggesting that New York hospitals would benefit from efforts to reduce costs through improving readmission rates. High readmission rates can indicate premature discharge, poor transitional care, or unacceptable levels of hospital-acquired infections. Hospital readmissions are a prime candidate for health care savings since many readmissions are avoidable, and improvements in the quality of care can significantly reduce readmission rates. Under this grant, MPR will determine current readmission rates for all New York State hospitals, analyze demographic factors in readmission, identify areas for improvement and cost savings, and consider various proposals for payment and health care reforms. The findings of this analysis will be widely disseminated to policymakers and hospitals across the State to encourage strategies that reduce hospital readmissions and eliminate unnecessary costs from the health care system.

Read the report associated with this grant, “Reducing Hospital Readmissions in New York State: A Simulation Analyis of Alternative Payment Incentives.”