Freed Associates

Reduce Avoidable Hospital Readmissions Using Your Existing Assets

By Alan Little

TOPIC: Health Reform 2.0

In 2015, healthcare organizations will be challenged to reduce the escalating costs associated with preventable hospital readmissions. Starting this year, hospitals that exceed the Centers for Medicare & Medicaid Services’ (CMS) 30-day readmission guidelines will face a rise in penalties to three percent. According to an October 2, 2014 article in the Kaiser Health News, “Medicare is fining a record number of Hospitals – 2,610 – for having too many patients return within a month for additional treatments…”

The penalties were initially limited to three conditions (heart failure, heart attack and pneumonia). Since the introduction of the Hospital Readmissions Reduction Program, two new conditions have been added – chronic lung problems (such as emphysema and bronchitis) and elective hip and knee replacements. Once a hospital exceeds the national average for readmissions, the penalties they incur are not limited to revenue tied to a single diagnosis group; they are applied to the hospital’s entire Medicare reimbursement revenue. The last thing hospital administrator’s need, when faced with continued increases in medical costs, is a reduction in revenue.

If your hospital is still struggling with how to meet the more stringent guidelines, the good news is that you may already have most of the resources you need to do so effectively.

A shift in focus can contribute to a cost-effective readmissions reduction strategy

Freed Associates has considered a number of solutions-based responses to this problem, and we believe the most successful solution begins with a radical shift in attitude away from “avoiding financial penalties” to “improving patient care” – a theme that any hospital prefers. When you focus on patient care, you look beyond core business services and how they affect your bottom line and start to imagine more innovative ways to help patients heal and take more responsibility for their own health.

Collaboration is key to innovation

Grassroots educational efforts – such as those offered by the National Readmission Prevention Collaborative – are bringing together healthcare industry leaders to share best practice case studies that identify tools and services that help meet the goals of the Hospital Readmissions Reduction Program. The Collaborative not only provides good strategies, but also sells a range of toolkits to meet specific goals.

Fragmented services can be turned into an enterprise asset

An effective readmission avoidance program can be developed with minimal new investment by simply leveraging a variety of existing hospital services. The challenge is in identifying how these interdependent services can be effectively combined to create a sustainable solution.

Consider combining previously siloed services in a way that was not originally intended. The following list is meant as a starting place for discussion. You may have other services than can be included in the mix.

Disease Management: The set of disease management services includes both in-sourced and out-sourced models. In the simplest terms, disease management seeks to provide diagnosis specific care management services to a cohort of like-patients.

Mobilehealth: Mobilehealth solutions, often referred to as mHealth, are designed to provide remote round-the-clock monitoring of health conditions that may lead to a readmission. While mobilehealth shows great promise, its technology providers are just beginning to understand that to be most effective, the operational processes that react to “actionable data” are far more important than the technology itself.

Call Centers: The call center and contact center service companies, including those that only serve healthcare industry clients, often have significant operational exposure as they commonly provide a variety of patient-related services. Interactive Voice Response (IVR) services can also have a place in staying in contact with patients, and prompting for responses to certain symptom related questions.

Predictive Data Modeling: Big data is being applied with the use of predictive algorithms that seek to manage a cohort “by exception.” The goal is to direct scarce healthcare resources to those in the greatest medical need. This contrasts with the more typical disease management approach of contacting each patient weekly to inquire about their recovery and the existence of certain telltale symptoms that need medical management.

Medication Adherence: Often a Pharmacy Benefit Manager-based service, medication adherence can be a key contributor to keeping symptoms in-check. It can also be used as a strong indicator of a patient’s level of engagement in managing his/her own care.

Transitions of Care Settings: The Eric A. Coleman, M.D. Care Transitions Model illustrates the issues associated with a typical shift from one care setting to another, and the complexities of receiving care from different physician and nursing teams during a single medical episode.

Patient Education: In addition to traditional education models, social media and SMS messaging offer a platform for patients to interact with other patients with similar health issues — as well as their own doctors — and communicate their individual medical concerns.

In many scenarios, each of the systems/services noted above have already been purchased and implemented to address a specific operational issue within a single department. Often, if a problem exists, the assets required to solve it are already owned by the hospital.

This is a place where our mantra, “don’t under utilize and don’t over invest” is especially relevant. We recommend you work to identify these underutilized, assets that, when combined, can solve problems and avoid additional capital investments. You may need to ignore those investments that aren’t ready to scale-up and accept an additional processing load. They can present an unexpected and unwelcome set of planning and timing challenges. If you have trouble ascertaining which services to employ and how to combine them for greatest effect, you may benefit from the objective advice of a healthcare consultant whose focus is on strategic planning.

Using the right combination of services can take you a long way toward integrating technologies, processes and reporting in a meaningful way that not only avoids or reduces future financial penalties, but also provides your patients with the ability to successfully manage more of their own care.


Alan Little has served senior roles in health plans, consulting firms, and technology companies. He has practice leadership experience in strategy, operations, and technology. He is a Vice President in Freed Associates Southern California practice.