Undue emphasis has been placed on rising rates of readmission to psychiatric facilities. After a decade of preoccupation with discharge rates, readmission statistics have been singled out in the last 15 years as the key factor for assessing hospital effectiveness. A study of a group of patients at high risk for recurrent hospitalization revealed that these patients were characterized more by features relating to environmental supports than by diagnosis. The operational definition for recurrent hospitalization (five or more admissions during the 2-year period preceding the latest admission) was effective in identifying this group; this is the first reported instance in which the definition has specified a certain number of admissions within a time-limited period. The findings of this study, as well as of an analysis of case histories and consumer opinion, led to the design of a pilot program for persons undergoing recurrent hospitalization. Readmission statistics are useless or misleading as measures of hospital effectiveness and efficiency; what matters is the way the former patients function in the community after discharge. Rather than simply trying to reduce the readmission rate psychiatric facilities should be examining the types of persons who are hospitalized recurrently to develop programs aimed at improving the functioning of these people in the community.