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Programs from the Centers for Medicare and Medicaid Services simultaneously promote strategies to lower hospital admissions and readmissions. However, there is concern that hospitals in communities that successfully reduce admissions may be penalized, as patients that are ultimately hospitalized may be sicker and at higher risk of readmission. We therefore examined the relationship between changes from 2010 to 2013 in admission rates and thirty-day readmission rates for elderly Medicare beneficiaries. We found that communities with the greatest decline in admission rates also had the greatest decline in thirty-day readmission rates, even though hospitalized patients did grow sicker as admission rates declined. The relationship between changing admission and readmission rates persisted in models that measured observed readmission rates, risk-standardized readmission rates, and the combined rate of readmission and death. Our findings suggest that communities can reduce admission rates and readmission rates in parallel, and that federal policy incentivizing reductions in both outcomes does not create contradictory incentives., (Project HOPE—The People-to-People Health Foundation, Inc.)