What Could You Do with $563 million? The High Cost of Readmissions Penalties

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What Could You Do with $563 million? The High Cost of Readmissions Penalties

October 10, 2019

$563 million is a lot of money.  And in healthcare, there is a direct impact from readmissions penalties and how those funds could be allocated to further improve quality patient care and provide innovative treatments.  Recently, the Centers for Medicare & Medicaid Services announced new readmissions penalties, and the projected cost of those penalties is staggering, with estimates around $563 million in 2020.  In summary, these penalties are assessed to hospitals that have sub-par performance with respect to patients being readmitted who had originally been treated for heart failure, heart attack, pneumonia, chronic lung disease, hip and knee replacement or coronary artery bypass graft surgery.  While this eight-year plan has yielded some positive momentum to improve patient recovery and communication, these penalties still have a significant impact on the ability of affected hospitals to better serve patient needs.




2,583 hospitals will be assessed penalties in 2020, for a total of $563 million.  On average, that equals almost $220,000 per affected hospital that will have assessed penalties based on reduced Medicare reimbursements.


What could a hospital do with an additional $220,000 each year?

  • Hire three nurses, four social workers or two hospital pharmacists based on annual compensation estimates

  • Purchase 20 exercise and rehab machines to help with patient recovery

  • Register clinicians for 30 CE classes or seminars

    … and much more

In effect, readmissions penalties have a direct impact on hospitals, and most importantly, on the ongoing care of patients as they recover from a hospital stay.


But there are also many hospitals that have addressed readmissions challenges, primarily through a focus on communications between patients and caregivers, both while in the hospital and especially after the patients have been discharged.  Numerous studies have shown that an active post-discharge communication plan has a significant positive impact on patient recovery, and equally important, a positive impact on patient satisfaction.  Communication is the best way to reverse this trend to further help patients and avoid very costly penalties.


At PREMEDEX, that’s what we do.  Our team of trained professionals equipped with our innovative technology helps hospitals across the United States connect with patients to ensure their recovery is progressing as planned, and to answer any questions they may have about their medications and follow-up appointments.  We contact hundreds of patients every day on behalf of our hospital clients, and then provide details of those conversations back to the hospital clinical staff for review and identification of potential issues.  With that approach, our combined efforts help resolve patient issues before a readmissions situation may occur.


What could your health system do with additional resources?  Likely fund additional staff, programs, equipment and many other objectives.  Most importantly, with additional resources, your team could further enhance the quality of patient care they are delivering today.  And that can start now with PREMEDEX … to expand the efforts of your team, to help avoid costly penalties and to improve patient satisfaction through active communication.


Click here to see how PREMEDEX helped a hospital client drive 2x higher patient satisfaction


Contact us today to see how we can help your team avoid costly penalties.


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