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Special Article

Rehospitalizations among Patients in the Medicare Fee-for-Service Program

List of authors.
  • Stephen F. Jencks, M.D., M.P.H.,
  • Mark V. Williams, M.D.,
  • and Eric A. Coleman, M.D., M.P.H.

Abstract

Background

Reducing rates of rehospitalization has attracted attention from policymakers as a way to improve quality of care and reduce costs. However, we have limited information on the frequency and patterns of rehospitalization in the United States to aid in planning the necessary changes.

Methods

We analyzed Medicare claims data from 2003–2004 to describe the patterns of rehospitalization and the relation of rehospitalization to demographic characteristics of the patients and to characteristics of the hospitals.

Results

Almost one fifth (19.6%) of the 11,855,702 Medicare beneficiaries who had been discharged from a hospital were rehospitalized within 30 days, and 34.0% were rehospitalized within 90 days; 67.1% of patients who had been discharged with medical conditions and 51.5% of those who had been discharged after surgical procedures were rehospitalized or died within the first year after discharge. In the case of 50.2% of the patients who were rehospitalized within 30 days after a medical discharge to the community, there was no bill for a visit to a physician's office between the time of discharge and rehospitalization. Among patients who were rehospitalized within 30 days after a surgical discharge, 70.5% were rehospitalized for a medical condition. We estimate that about 10% of rehospitalizations were likely to have been planned. The average stay of rehospitalized patients was 0.6 day longer than that of patients in the same diagnosis-related group whose most recent hospitalization had been at least 6 months previously. We estimate that the cost to Medicare of unplanned rehospitalizations in 2004 was $17.4 billion.

Conclusions

Rehospitalizations among Medicare beneficiaries are prevalent and costly.

Introduction

Medicare currently pays for all rehospitalizations, except those in which patients are rehospitalized within 24 hours after discharge for the same condition for which they had initially been hospitalized. Recent policy proposals would alter this approach and create payment incentives to reduce the rates of rehospitalization. The Medicare Payment Advisory Commission (MedPAC) recommended to Congress in its report in June 2008 that hospitals receive from the Centers for Medicare and Medicaid Services (CMS) a confidential report of their risk-adjusted rehospitalization rates and that after 2 years, rates should be published. MedPAC also recommended complementary changes in payment rates, so that hospitals with high risk-adjusted rates of rehospitalization receive lower average per case payments. The commission reported that Medicare expenditures for potentially preventable rehospitalizations may be as high as $12 billion a year.1 In July 2008, the National Quality Forum adopted two measures of hospital performance based on the rate of rehospitalization,2 and the CMS indicated an interest in making the rehospitalization rate a measure for value-based hospital payment.3 Reducing rehospitalization is an important element of President Barack Obama's February 2009 proposal for financing health care reform.4 Such proposals would radically change the accountability of hospitals for patients' outcomes after discharge.

These proposals addressing all-cause rehospitalization highlight the importance of understanding the factors that influence the disparate causes of rehospitalization. Although there is extensive literature on rehospitalization attributed to particular conditions, especially heart failure,5 there is very limited research addressing the broader issues involving the multitude of diseases and processes that contribute to rehospitalization. Until the 2007 MedPAC report (cited in the 2008 MedPAC report1), there was, to our knowledge, no follow-up of the measurement of the overall Medicare rehospitalization rate that Anderson and Steinberg made in their seminal study in 1984.6 Building on the 2007 MedPAC report, we undertook this study to examine three key questions: What is the frequency of unplanned and planned rehospitalizations within 30 days after discharge? How long does the elevated risk of rehospitalization persist? What is the frequency of follow-up outpatient visits with a physician after a patient's discharge from a hospital?

Methods

Data Sources

We used data from the Medicare Provider Analysis and Review (MEDPAR) file for the 15-month period from October 1, 2003, through December 31, 2004; the MEDPAR file does not contain any discharges from 855 critical access hospitals or discharges of patients who were enrolled in managed-care plans. Inpatient claims for individual patients were linked with the use of the Health Insurance Claim Number–Beneficiary Identification Code. To study follow-up visits, we used the 5% national sample of linked physician and hospital claims for 2003 that is maintained in the CMS Chronic Condition Data Warehouse.7 We used data from different intervals depending on the amount of previous or follow-up data that we needed for the analysis. The study design and procedures were approved by the Colorado Multiple Institutional Review Board.

Assessment of Rehospitalization and Diagnoses

We defined the rate of rehospitalization in the following way: the number of patients who were discharged from an acute care hospital and readmitted to any acute care hospital within 30 days divided by the total number of people who were discharged alive from acute care hospitals. We counted no more than one rehospitalization for each discharge. We excluded from the numerator and denominator patients who were transferred on the day of discharge to other acute care hospitals, including patients who were admitted to hospital specialty units, inpatient rehabilitation facilities, and long-term care hospitals (we included all other same-day rehospitalizations in our analyses). We also excluded patients who were rehospitalized for rehabilitation (diagnosis-related group [DRG] 462) within 30 days after discharge. We calculated rates over a 12-month period for the cohort that was discharged between October 1 and December 31, 2003, after determining that seasonal variation was less than 0.2 percentage point. In this calculation, data for a patient were censored when he or she was rehospitalized or died before hospitalization.

To examine the patterns of diagnoses at discharge and rehospitalization, we identified the five medical and five surgical DRGs that accounted for the largest number of rehospitalizations within 30 days after discharge and tabulated the 10 most frequent reasons for rehospitalization for each DRG. To estimate the fraction of rehospitalizations that might have been planned, we examined the 100 DRGs that are most frequently assigned to rehospitalized patients and ranked them according to whether planning was clinically plausible (e.g., rehospitalization for pneumonia is very unlikely to have been planned, whereas rehospitalization for placement of a stent could well be) and whether the rate of rehospitalization for the DRG showed the exponential rate of decrease that is characteristic of most DRGs when planned rehospitalization is unlikely (for details, see the Supplementary Appendix, available with the full text of this article at NEJM.org).

We calculated a hospital's expected rehospitalization rate as the rehospitalization rate expected if each of its Medicare discharges had the same rehospitalization risk as the national average for Medicare discharges in the same DRG (indirect adjustment). We used the ratio of observed to expected hospitalizations to stratify hospitals into quartiles and calculated differences in rehospitalization rates among hospitals with 1000 or more Medicare discharges.

We used the Medicare provider number to assess whether the patient was readmitted to the same hospital from which he or she had been discharged. We also tabulated length of stay and Medicare payment weights for DRGs (which are based on the average use of hospital resources for treatment of Medicare patients) for rehospitalized patients and for those who had not been hospitalized in the previous 6 months.

Reliability of Data

Published definitions of DRGs include a classification of the diagnosis as medical or surgical. The CMS systematically audits the coding of DRGs. Dates of admission and discharge are tied to hospital billing systems, and errors may trigger audits or payment reviews. Whether a beneficiary is receiving dialysis treatment or is disabled is determined in the Medicare eligibility process. Discharge disposition is generally not used for payment and is often unreliable. We used black race, which is reported to be reliably coded, as a covariate but did not use Hispanic ethnic group, which is reported to be seriously undercoded.8,9

Statistical Analysis

We used the Cox proportional-hazards model to assess patient-level predictors of rehospitalization. The number of days before rehospitalization represented the survival time, data were censored at the time of death or the end of the observation period, and covariates were the patient characteristics that were available in the MEDPAR file or that could be calculated from the information in it: the hospital's ratio of observed to expected hospitalizations, the national rehospitalization rate for the patient's DRG, race (black or nonblack), use or nonuse of dialysis, presence or absence of disability, sex, Supplemental Security Income (SSI) status, length of stay as compared with the national average for the DRG, number of hospitalizations in the preceding 6 months, and age group. We included the hospital's ratio of observed to expected hospitalizations as a covariate so that differences among hospitals would not obscure the effects of other predictors. Hospital-level characteristics, such as the number of beds, urban or rural location, and teaching or nonteaching status — characteristics that Anderson and Steinberg used in their analyses6 — are not available in the MEDPAR file, but their effect should be captured in the hospital's ratio of observed to expected hospitalizations. For this analysis we used discharges from April 1 through September 30, 2004, to allow 6 months for identifying previous hospitalizations. We performed all analyses with SAS software.10

Results

Frequency of Rehospitalization

Table 1. Table 1. Rehospitalizations and Deaths after Discharge from the Hospital among Patients in Medicare Fee-for-Service Programs.

A total of 13,062,937 patients enrolled in the Medicare fee-for-service program were discharged from 4926 hospitals between October 1, 2003, and September 30, 2004; 516,959 of these patients were recorded as having died, and 690,276 went to other acute care settings, leaving 11,855,702 (90.8%) at risk for rehospitalization. Table 1 shows the cumulative percentage of rehospitalizations and outpatient deaths before rehospitalization by 30, 60, 90, 180, and 365 days after discharge for the cohort of Medicare patients discharged between October 1 and December 31, 2003; 19.6% of the patients were rehospitalized within 30 days, 34.0% within 90 days, and 56.1% within 365 days. About two thirds (62.9%) of Medicare fee-for-service beneficiaries who were discharged (67.1% after hospitalization for a medical condition and 51.5% after hospitalization for a surgical procedure) were rehospitalized or died within a year. To avoid double counting, we do not report deaths that occurred during or after rehospitalization. When we omitted cases of end-stage renal disease and included same-day readmissions, as Anderson and Steinberg did,6 the 60-day rate of rehospitalization was 31.1%.

Reasons for Rehospitalization

Table 2. Table 2. Highest Rates of Rehospitalization and Most Frequent Reasons for Rehospitalization, According to Condition at Index Discharge.

Table 2 shows the five medical and five surgical reasons for the index (i.e., initial) hospitalization that were associated with the largest number of rehospitalizations and the top 10 reasons for rehospitalization for each index reason. Most rehospitalizations (84.4% among patients who were discharged after initial hospitalization for medical conditions and 72.6% among patients who were discharged after surgical procedures) were for medical diagnoses. The 100 most frequent rehospitalization DRGs accounted for 73.2% of total rehospitalizations. Among the rehospitalizations ascribed to these 100 DRGs, 10% belonged to 19 DRGs, such as chemotherapy and stent insertion, for which we estimated that planned rehospitalizations were probably an important part of total rehospitalizations (see the Supplementary Appendix). We did not attempt to estimate the percentage of these rehospitalizations that were actually planned.

Geographic Pattern

Figure 1. Figure 1. Rates of Rehospitalization within 30 Days after Hospital Discharge.

The rates include all patients in fee-for-service Medicare programs who were discharged between October 1, 2003, and September 30, 2004. The rate for Washington, DC, which does not appear on the map, was 23.2%.

Figure 1 shows the geographic pattern of rates of rehospitalization within 30 days after discharge in the United States and two of its territories. The rehospitalization rate was 45% higher in the five states with the highest rates than in the five states with the lowest rates.

Hospitals

Except as noted, the following results are for hospitals with 1000 or more annual Medicare discharges. The correlation of the number of patients discharged with rehospitalization rates was low (r=−0.11, P<0.001). Hospitals with a ratio of observed to expected hospitalizations in the highest quartile had an expected 30-day rehospitalization rate of 20.6%, as compared with their observed rate of 26.1%. The corresponding rates for hospitals in the lowest quartile were 18.7% and 14.3%, respectively. One quarter (25.1%) of the admissions in hospitals in the highest quartile came from rehospitalizations within 30 days after discharge (as compared with 17.0% of admissions in all hospitals and 13.1% of admissions in hospitals in the lowest quartile).

The rehospitalization rate that was expected on the basis of DRGs strongly predicted the observed rate (R2=0.276, P<0.001). Unadjusted hospital rates correlated strongly with DRG-adjusted rates (r=0.975, P<0.001); rehospitalization rates 30 and 90 days after discharge also correlated strongly (r=0.953, P<0.001). In the case of hospitals with 1000 or more Medicare discharges, 24.4% (interquartile range, 17.4 to 29.5) of the patients who were rehospitalized within 30 days were admitted to another hospital; in the case of hospitals with fewer than 1000 discharges, 44.2% (interquartile range, 23.6 to 60.0) of the patients were admitted to another hospital.

Patients

Table 3. Table 3. Predictors of Rehospitalization within 30 Days after Discharge.

The average hospital stay for rehospitalized patients was 0.6 day (13.2%) longer than the stay for patients in the same DRG who had not been hospitalized within the previous 6 months (2,962,208 patients) (P<0.001). The average Medicare payment weight is 1.41 for index hospitalizations and 1.35 for rehospitalizations. Table 3 shows the relative risk of rehospitalization within 30 days after discharge that was associated with each of the variables we analyzed. The reason for the index hospitalization (i.e., the DRG), the number of previous hospitalizations, and the length of stay had more influence on the risk of rehospitalization than demographic factors such as age, sex, black race, SSI status, and presence or absence of disability.

Outpatient Visits

Figure 2. Figure 2. Patients for Whom There Was No Bill for an Outpatient Physician Visit between Discharge and Rehospitalization.

Data are for patients in fee-for-service Medicare programs who were discharged to the community between January 1, 2003, and December 31, 2003, after an index hospitalization for a medical condition. Data are derived from claims maintained in the Chronic Condition Data Warehouse of the Centers for Medicare and Medicaid Services.

Figure 2 shows the percentage of patients discharged to the community after hospitalization for medical conditions and subsequently rehospitalized for whom there was no bill for an outpatient physician visit between the time of discharge and rehospitalization; both the percentage on each day after discharge and the cumulative percentage are shown. There was no associated bill for an outpatient visit for 50.1% of the patients who were rehospitalized within 30 days after discharge and for 52.0% of those who were rehospitalized for heart failure within 30 days after discharge.

Discussion

The 19.6% rate of rehospitalization within 30 days after discharge that we report for Medicare beneficiaries in 2003–2004 is consistent with the rate in MedPAC's 2008 report of 2005 data (17.6% at 30 days),1 and the difference probably reflects methodologic differences rather than a temporal trend. We found that the rehospitalization rate at 60 days was 31.1% when we analyzed the data in the same way as Anderson and Steinberg, who reported a rate of 22.5% at 60 days for the 1976–1978 period.6 This larger difference is more likely to indicate an actual increase in rehospitalization rates over time, perhaps owing to a shorter duration of index hospitalization or to the increase in ambulatory surgery over the past 30 years. Friedman and Basu found that among persons 18 to 64 years of age in five states, the rate of rehospitalization for any reason within 6 months after discharge was 81% of the rate among those older than 64 years of age,11 which is consistent with our finding that the rehospitalization rate was only weakly related to age.

Our analysis also shows that the risk of rehospitalization after discharge persists over time (Table 1). Further studies will be needed to understand the relative contributions to this risk of failures in discharge planning, insufficient outpatient and community care, and severe progressive illness.

This study was limited by our reliance on Medicare billing data, which provide an incomplete picture and contain some unreliable elements, and on DRGs, which are not fully adjusted for severity of illness. Unmeasured differences in severity of illness might bias comparisons of rehospitalization rates across states, hospitals, and demographic groups. However, DRG adjustment is a moderately strong predictor of the rehospitalization rate (R2=0.276), so the very high correlation between unadjusted and DRG-adjusted hospital-level rates suggests that additional adjustment for risk may not add greatly to the analysis of rehospitalization rates. In addition, our assessment of outpatient follow-up was limited by the use of billing data that do not capture most visits to nonphysician providers.

Fisher et al.12 have argued that the availability of hospital beds induces demand without improving health and that the availability of a bed may also facilitate hospitalization if a patient's condition deteriorates, but we were unable to link measures of the number of hospital beds in a community to the data analyzed here. Nevertheless, their argument bears directly on the question of whether higher rehospitalization rates are evidence of better care or just more care. Similarly, better access to primary care and better continuity of care may reduce the number of rehospitalizations, but we have no data on where in the United States these features are provided, nor do we know where a “medical home”13 — an enhanced primary care coordinator for all of a patient's care — has been adopted.

Five lines of evidence suggest that rates of rehospitalization might be reduced. First, controlled studies14-16 have shown that certain interventions at the time of discharge sharply reduce the rates of rehospitalization among patients with heart failure and other Medicare beneficiaries, and preliminary reports suggest that these and other interventions are more effective when used more widely. In contrast, coordination-of-care interventions that are limited to community settings appear to be ineffective in reducing rehospitalization.17 Research also shows that supportive palliative care can reduce rehospitalization and increase patient satisfaction.18 In addition, the Quality Improvement Organizations appear to have reversed a national trend of increased hospitalizations from home settings by working with individual agencies that provide home health care.19

Second, the absence of a bill for an outpatient physician visit in the case of more than half of the patients with a medical condition who were readmitted within 30 days after discharge to the community is of great concern and suggests a considerable opportunity for improvement. Our concern is heightened by the same finding among patients with heart failure, who are known to have a response to intensified care.20 Hospitals and physicians may need to collaborate to improve the promptness and reliability of follow-up care.

Third, although claims data are less informative about follow-up care after surgical procedures (because of the global surgical fee), many patients who are discharged after a surgical procedure may benefit from earlier medical follow-up, since a substantial majority of postsurgical rehospitalizations are for medical conditions.

Fourth, our estimate that 90% of rehospitalizations within 30 days after discharge are unplanned suggests that rehospitalization is probably not primarily driven either by clinical practices (e.g., staged surgery) that cannot be efficiently rendered in one hospitalization or by profit-seeking division of services into multiple hospitalizations.

Fifth, the variation among states (Figure 1) and hospitals suggests that improvement on a national scale may be possible, but the data do not show which practices cause the differences or whether the differences are exportable.

Medicare payments for unplanned rehospitalizations in 2004 accounted for about $17.4 billion of the $102.6 billion in hospital payments from Medicare,21 making them a large target for cost reduction. (This cost estimate is derived by multiplying the 19.6% rehospitalization rate by 90%, which represents the percentage of unplanned rehospitalizations, and multiplying that product by 96%, since DRG-based payments for rehospitalizations are 4% lower than those for index hospitalizations.) Convincing estimates of potential savings must await evaluation of large-scale improvement efforts.

Although the care that prevents rehospitalization occurs largely outside hospitals, it starts in hospitals. In a quarter of the hospitals, about 25% of the admissions are rehospitalizations that occur within 30 days after discharge. Cynics may suggest that preventing rehospitalization is not in the financial interest of hospitals, but our analysis suggests a more complex picture. Rehospitalizations may not be profitable for many hospitals. Although the average length of stay for rehospitalized patients was 0.6 day more than that for patients in the same DRG whose most recent hospitalization had been at least 6 months previously, DRG-based payments would be largely the same. For a hospital with excess capacity, there may be as much financial benefit from rehospitalizations as from first-time admissions, but for a hospital that manages its capacity more carefully, there may not.

Almost all hospitals will need help in gauging their performance with respect to rehospitalizations, because they have no access to data on the 20 to 40% of their patients who are rehospitalized elsewhere. Only holders of all-hospital discharge data, such as governments and other third-party payers, have the ability to track patients across providers and systems. Medicare could help by providing data on all Medicare rehospitalizations (suitably de-identified) to help hospitals and communities better understand their performance.

Our analysis generally confirms Anderson and Steinberg's findings regarding the value of demographic factors in predicting the risk of rehospitalization,6 but it shows that previous rehospitalization, a longer index hospitalization as compared with the norm for the DRG, the need for dialysis, and the DRG to which the patient is assigned at the end of the stay are more powerful predictors. However, when the typical patient has almost two chances in three of being rehospitalized or of dying within a year after discharge, it is probably wiser to consider all Medicare patients as having a high risk of rehospitalization. For example, ensuring that a follow-up appointment with a physician is scheduled for every patient before he or she leaves the hospital is probably more efficient than trying to identify high-risk patients and arranging follow-up care just for them.

Rehospitalization is a frequent, costly, and sometimes life-threatening event that is associated with gaps in follow-up care. We are beginning to understand that the rate of rehospitalization can be reduced with the implementation of more reliable systems, but it would be premature to predict how much reduction can be achieved. Although the rehospitalization rate is often presented as a measure of the performance of hospitals, it may also be a useful indicator of the performance of our health care system.22 From a system perspective, a safe transition from a hospital to the community or a nursing home requires care that centers on the patient and transcends organizational boundaries. Our purpose in this report has been to strengthen the empirical foundation for designing and providing such care.

Funding and Disclosures

Presented in part at the meeting, Reducing Hospital Readmissions, sponsored by the Commonwealth Fund and AcademyHealth, in Washington, DC, January 25, 2008.

Supported in part by the Institute for Healthcare Improvement (a senior fellowship to Dr. Jencks) and the John A. Hartford Foundation (2006-0229 and 2005-0194 to Drs. Williams and Coleman, respectively).

Dr. Jencks reports receiving consulting or speaking fees from the National Quality Forum, the Colorado Foundation for Medical Care, IPRO, Qualidigm, the Commonwealth Fund, RTI International, and the Japanese Society for Quality and Safety in Health Care and having been employed by the Centers for Medicare and Medicaid Services (CMS) until 2007; Dr. Williams, receiving consulting fees from the Aetna Foundation through the University of Colorado, and being editor-in-chief of the Journal of Hospital Medicine; and Dr. Coleman, receiving grant support from the Aetna Foundation and the Atlantic Philanthropies and contract support from the California HealthCare Foundation and the Community Health Foundation of Central and Western New York. Drs. Jencks, Williams, and Coleman have served as faculty for the Institute for Healthcare Improvement. No other potential conflict of interest relevant to this article was reported.

This article (10.1056/NEJMsa0803563) was updated on April 2, 2009, at NEJM.org.

We thank David Gibson and Spike Duzor of the CMS for help in obtaining the Chronic Conditions Data Warehouse files; Gary Schultheis of CMS for providing exploratory data files; Wato Nsa, Alan Ma, and Dale Bratzler of the Oklahoma Foundation for Medical Care for providing an early version of the DRG frequency table; Sarah Kier of Northwestern Memorial Hospital for assistance with the map; Jessica Kazmier of the Northwestern Medical Faculty Foundation for assistance with the references; and Glenn Goodrich of the University of Colorado at Denver for preparing the 2003–2004 MEDPAR files.

Author Affiliations

From an independent consulting practice, Baltimore (S.F.J.); the Division of Hospital Medicine, Northwestern University Feinberg School of Medicine, Chicago (M.V.W.); and the Care Transitions Program, Division of Health Care Policy and Research, University of Colorado at Denver, Denver (E.A.C.).

Supplementary Material

References (22)

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Citing Articles (3424)

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    Letters

    Figures/Media

    1. Table 1. Rehospitalizations and Deaths after Discharge from the Hospital among Patients in Medicare Fee-for-Service Programs.
      Table 1. Rehospitalizations and Deaths after Discharge from the Hospital among Patients in Medicare Fee-for-Service Programs.
    2. Table 2. Highest Rates of Rehospitalization and Most Frequent Reasons for Rehospitalization, According to Condition at Index Discharge.
      Table 2. Highest Rates of Rehospitalization and Most Frequent Reasons for Rehospitalization, According to Condition at Index Discharge.
    3. Figure 1. Rates of Rehospitalization within 30 Days after Hospital Discharge.
      Figure 1. Rates of Rehospitalization within 30 Days after Hospital Discharge.

      The rates include all patients in fee-for-service Medicare programs who were discharged between October 1, 2003, and September 30, 2004. The rate for Washington, DC, which does not appear on the map, was 23.2%.

    4. Table 3. Predictors of Rehospitalization within 30 Days after Discharge.
      Table 3. Predictors of Rehospitalization within 30 Days after Discharge.
    5. Figure 2. Patients for Whom There Was No Bill for an Outpatient Physician Visit between Discharge and Rehospitalization.
      Figure 2. Patients for Whom There Was No Bill for an Outpatient Physician Visit between Discharge and Rehospitalization.

      Data are for patients in fee-for-service Medicare programs who were discharged to the community between January 1, 2003, and December 31, 2003, after an index hospitalization for a medical condition. Data are derived from claims maintained in the Chronic Condition Data Warehouse of the Centers for Medicare and Medicaid Services.

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