Patients who survive the acute phase of respiratory failure often are transferred to units with specialized expertise. These patients have a high risk of being readmitted to the acute care hospital. We conducted this study to determine whether supplementing a written report with a verbal telephone report reduces readmission rates within the first 72 h after discharge and decreases hospital costs. The study design was observational with a historical control group that included patients admitted to our respiratory acute care unit between November 2003 and October 2005. In November 2005, we implemented a strategy in which a written report at discharge was supplemented with a telephone report by the physician or nurse practitioner, nurse, and respiratory therapist. The intervention group began in November 2005 and continued through October 2007. The primary end point was readmission to Massachusetts General Hospital within 72 h of discharge. We also determined the cost related to readmission. The study included 362 patients. The OR for readmission if the handoff included a verbal report was 0.42 (95% CI, 0.17-1.04). The total hospital cost was significantly lower in the group where verbal report was used ($111,723 vs $148,574; P = .002). Supplementing a written report with a verbal telephone report was associated with a significant reduction in cost and an average savings of ∼ $184,000 for every 100 patients discharged, representing added value in delivered care.