“Welcome back” are two words you’d really rather not hear at a hospital, especially if you’ve just been discharged. Yet one in five Medicare patients found themselves back in the hospital within 30 days of leaving it in 2003 and 2004, according to a recent study in the New England Journal of Medicine. Even more troubling is the possibility that three-quarters of those readmissions might have been prevented, as estimated in a 2007 report by the Medicare Payment Advisory Commission (MedPAC), an independent agency that advises Congress.

What gives? All too often, experts, say, the problems that send patients back to the hospital might have been avoided if there had been a better handoff from the hospital to the people responsible for the next phase in a patient’s recovery, whether it’s the patient himself and his family, a home health agency, a nursing home or a hospice. “We don’t do a good job of coordinating care,” says Patricia Rutherford, vice president at the Institute for Healthcare Improvement, which is directing a multi-state initiative to reduce rehospitalizations.

Discharged patients may be confused about their new medication regimen, for example, or they may not understand diet restrictions. Maybe they don’t have transportation to a follow-up appointment; worse, they may not have an appointment scheduled at all. In fact, the New England Journal of Medicine study found that half of patients who were readmitted within 30 days hadn’t visited a doctor since their discharge. “For very sick patients being discharged by hospitals, we think that’s way too late,” says Rutherford.

Hospital readmissions aren’t only bad for patients’ health, they’re expensive. MedPAC estimated that in 2005 readmissions cost the Medicare program $15 billion, $12 billion of which could have been avoided.

The health-care overhaul takes aim at the problem by penalizing hospitals with higher-than-expected readmission rates for Medicare patients who had been treated for heart failure, heart attack or pneumonia. Those hospitals could see their Medicare payments reduced by up to 1 percent beginning in October 2012, 2 percent the following year and 3 percent the next. The law expands in later years the list of conditions that can result in penalties.

The Department of Health and Human Services allows consumers to make side-by-side comparisons of hospitals’ readmission rates for heart failure, heart attack and pneumonia at hospitalcompare.hhs.gov.

“There’s a very strong case to be made that if you want to change something as important as readmission, you’ve got to look at every lever you’ve got,” says Stephen Jencks, a physician and lead author of the NEJM study. “Payment is a very important one, but by no means the only one.”

A growing number of hospitals and health systems are already working on the readmissions problem with support from nonprofit groups and foundations.

Piedmont Hospital in Atlanta is one. A few years ago, it began participating in Project Boost, a discharge-transition program developed by the Society of Hospital Medicine.

Through Boost, Piedmont proactively targets patients who are at high-risk of readmission. Staff members use a checklist to ensure that potential logistical and psychosocial problems are addressed before the patient leaves the hospital. Another priority: scheduling patients before discharge for their first follow-up visit to the doctor.

Patients also receive a form to take home that explains in simple terms why they were in the hospital; what they need to do to continue their recovery, including medications, diet restrictions and warning signs of trouble; and whom to call if they experience problems. Within three days of discharge, a nurse calls to check on them.

“It’s more work, it takes more time and there’s more confusion” until the new processes are in place, says Matthew Schreiber, chief medical officer for the 480-bed hospital. But the effort has paid off. Thirty-day readmission rates for patients under age 70 have declined from 13 percent to just under 4 percent since the program began; rates for those 70 and older have dropped from 16 percent to 11 percent.

A Project Boost phone call may have helped Bill Cox avoid a hospital readmission. Among many medical problems, the 58-year-old recently had femoral bypass surgery at Piedmont to reroute blood from the large artery in his leg to avoid a blockage there. After Cox returned home, a nurse practitioner from the hospital called to check on how he was doing. One of the questions she asked his wife, Rhonda, was whether he had had a blood test to see if his dose of Coumadin, a blood thinner, was the correct one. Coumadin can cause fatal bleeding, and patients who are on it must have their blood tested regularly. He hadn’t done so, so the nurse practitioner asked the local home health agency helping the couple to arrange for the test.

As it turned out, the dose needed adjustment. “His blood was too thin,” says Rhonda Cox. “It was just like water.”