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For-Profit Hospitals Have Highest Rate of Medicare Readmissions, Study Finds


Readmission rates for Medicare patients with 6 major diseases were statistically higher among for-profit hospitals compared with nonprofit or government hospitals, according to a new study.

Readmission rates for Medicare patients with 6 major diseases were statistically higher among for-profit hospitals compared with nonprofit or government hospitals, according to a new study.

Using data from CMS' Hospital Readmissions Reduction Program (HRRP) program for 2012 to 2015, researchers analyzed the readmissions data for patients with acute myocardial infarction (AMI), heart failure (HF), coronary artery bypass graft (CABG), pneumonia (PN), chronic obstructive pulmonary disease (COPD), and total hip arthroplasty and/or total knee arthroplasty (THA/TKA).

In an interview with The American Journal of Managed Care®, Andrew D. Boyd, MD, associate professor in the Department of Biomedical and Health Information Sciences College of Applied Health Sciences, University of Illinois at Chicago, said that he and his fellow authors did not intentionally set out to discover this finding. But once they started looking at the data, they realized what was possible.

“We wanted to see normalized data for patients by disease state,” said Boyd, who is also the associate chief health information officer for innovation and research at the university. “Are there regional variations? Are there variations based on illness?”

The findings were somewhat surprising, as some regions of the country—the Southeast, for example—have a greater concentration of for-profit hospitals, yet no regional variations were found.

Other studies have found similar results when using data from acute care facilities or nursing homes, but this study covers every hospital in the United States. “We tried to find additional explanations, but we didn’t find any,” Boyd said of the findings.

Read more about lower Medicare spending with HRRP.

Reducing preventable readmissions among Medicare patients has become an important priority. The authors noted that the Medicare Payment Advisory Commission found that almost one-fifth of beneficiaries discharged are readmitted to the hospital within 30 days, and that a 2014 report found that 10% to 50% of all readmissions are potentially preventable and cost Medicare $17.4 billion annually.Readmissions fall into 4 areas: postoperative surgical complications, improper discharge care of patients, issues with medication adherence, and reoccurrence of chronic conditions such as COPD or heart failure. Patients with heart failure and COPD have the highest readmission rate, at 23% to 26%, the study said.

The study used the same methodology as CMS to calculate the 30-day risk-standardized readmission measures for the Hospital Inpatient Quality Reporting Program, and HRRP data on readmission ratios from 14,307 disease-specific hospital reports were mapped to type of hospital ownership.

A readmission ratio less than 1 was considered good, whereas a ratio greater than 1 implied excess readmission. For each disease, the readmission ratio was categorized into 4 intervals: less than 0.8, 0.8 to 0.99, 1 to 1.2, and greater than 1.2 for each disease.

The paper grouped hospitals into “green zones” and “red zones,” with hospitals falling into the green zone if their ratio was less than 1 and the red zone if their ratio was greater than 1. The green zone was dominated by government and nonprofit hospitals and the red zone was dominated by for-profits.

The researchers also ranked hospitals by those with the 10 best hospital readmission rates and those with the worst 10.

For the top 10, government and nonprofit hospitals predominated the list for HF, AMI, COPD, and CABG, whereas proprietary hospitals were included in the topmost ranking only for THA/TKA and PN.

Boyd said his study has implications for payers and purchasers seeking value-based care, as the hospital industry is in a period of consolidation and some patients have decreased choices about where they can get treated. Policy makers may want to consider if readmission penalties are sufficient, examine how patient care can be improved, and make sure that type of ownership does not impact care quality, he said.

The authors surmised that ownership structure is associated with higher readmission rates because for-profit hospitals have different expectations for profit and revenue pressures.


Mittal M, Wang CH, Goben AH, Boyd AD. Proprietary management and higher readmission rates: a correlation [published online September 18, 2018]. PLoS ONE. doi: 10.1371/journal.pone.0204272.

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