The continuing critical importance of reducing potentially preventable readmissions

Aug. 27, 2021 / By Gerald Tracy

This year, much attention is appropriately being focused on improving health equity—both in access and quality of care provided. True equity in care means that we should not see wide swings in variation of potentially avoidable health events, such as complications or readmissions, across regions or between social influences such as race or income.

The importance of reducing preventable hospital readmissions was first recognized in MedPAC’s 2007 groundbreaking report to Congress on payment policy for inpatient readmissions1. MedPAC found that more than 13 percent of readmissions within 30 days were preventable, representing more than $12 billion per year. Since then, Congress enacted the Affordable Care Act and accompanying Medicare readmissions program to mixed reviews of program success. 

At the same time, more than a dozen state Medicaid programs have implemented successful programs to track comparative hospital and/or managed care plan readmissions rates and to adjust payment based on performance. Some of these state programs have dramatically reduced readmissions and associated costs over time. For example, Texas Medicaid has reduced potentially preventable readmissions by 25 percent in its standard managed care program and by 15 percent in its Medicaid Managed Long Term Services and Supports (MLTSS) program in the first three years of its pay for outcomes initiative2. New York Department of Health (DOH) has similarly reduced potentially preventable readmissions by 17 percent and potentially preventable admissions by 21 percent in the first four years of its Delivery System Reform Incentive Payment (DSRIP) program, generating cumulative savings exceeding $500 million3.

While the savings to a health care program are well defined from such initiatives, the more important side of the story that is often missed is the impact to the patient—the impact of better care. In 2011, the Minnesota Hospital Association (MHA) launched the Reducing Avoidable Readmissions Effectively (RARE) program4. By all accounts, RARE was a major success by reducing statewide potentially preventable readmissions by 20 percent and saving more than $70 million in a two-year period. 

RARE rightfully promotes the more important outcome of the program—the prevention of 4,570 avoidable hospital admissions and ability of patients to spend 18,280 more nights of sleep at home on their own pillow4. For this, the RARE campaign won the 2014 National Quality Forum’s John Eisenberg Award for best patient safety program in the United States5.

Recently at HIMSS, the University Medical Center (UMC) of El Paso presented on its efforts to succeed under Texas Medicaid’s readmissions incentive program6. Specifically, UMC launched an ambitious improvement effort that focused on designing patient interventions for its Medicaid and low income patients that positively impacted a set performance metrics. These efforts enabled hospital leaders to probe the data and make decisions to improve patient care in real time. UMC has been able to significantly reduce potentially preventable readmissions and earn an average of $30 million annually in financial incentives – all to keep patients healthier.

Programs like these provide important lessons on how we can and should successfully improve health equity in the quality of care by reducing variation in the care being provided.   

Gerald Tracy, state programs director for the 3M Health Information Systems Regulatory and Government  Affairs program.


  1. MedPAC  Report to Congress  2007:  Payment Policy for Inpatient Readmissions, Chapter 5
  2. Texas Health and Human Services Commission, Combined Report on Quality-Based Payment and Delivery Reforms in Medicaid and the Children’s Health Insurance Program, Report to the Texas Legislature, Feb. 2017, and Texas Association of Health Plans, Senate Bill 760 Public Stakeholder Forum, 6/6/16 .
  3. New York Department of Health. Delivery System Reform Incentive Payment (DSRIP) Amendment Request. Albany, NY: NYDOH, Sept. 17, 2019, pp.2-3.
  4. RARE Campaign prevents 4,570 avoidable hospital readmissions > MHA (
  5. McCoy KA, Bear-Pfaffendof, K, Foreman JK, Daniels T, Zabel EW, Grangaard LJ, Trevis JE, Cummings KA. Reducing Avoidable Hospital Readmissions Effectively: A Statewide Campaign. Joint Commission Journal of Quality and Patient Safety. 2014
  6. Healthcare IT News:  Texas hospital averages $30M in gains per year through state incentive program” by Bill Salwicki, August 4,2021