Abstract Background It is not clear which part of the variation in hospital readmissions can be attributed to the standard of care hospitals provide. This is in spite of their widespread use as an indicator of a lower quality of care. The aim of this study is to assess the variation in readmissions on the hospital level after adjusting for case-mix factors. Methods We performed multilevel logistic regression analyses with a random intercept for the factor ‘hospital’ to estimate the variance on the hospital level after adjustment for case-mix variables. We used administrative data from 53 Dutch hospitals from 2010 to 2012 (58% of all Dutch hospitals; 2,577,053 admissions). We calculated models for the top ten diagnosis groups with the highest number of readmissions after an index admission for a surgical procedure. We calculated intraclass correlation coefficients (ICC) per diagnosis group in order to explore the variation in readmissions between hospitals. Furthermore, we determined C-statistics for the models with and without a random effect on the hospital level to determine the discriminative ability. Results The ICCs on the hospital level ranged from 0.48 to 2.70% per diagnosis group. The C-statistics of the models with a random effect on the hospital level ranged from 0.58 to 0.65 for the different diagnosis groups. The C-statistics of the models that included the hospital level were higher compared to the models without this level. Conclusions For some diagnosis groups, a small part of the explained variation in readmissions was found on the hospital level, after adjusting for case-mix variables. However, the C-statistics of the prediction models are moderate, so the discriminative ability is limited. Readmission indicators might be useful for identifying areas for improving quality within hospitals on the level of diagnosis or specialty.