Blog, The Hospital Finance Podcast®

Combating Hospital Readmissions to Improve Health System and Patient Outcomes [PODCAST]

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In this episode, Dr. Ahzam Afzal, Co-founder and CEO of Puzzle Healthcare, and Matt Nieukirk, Director of Skilled Nursing Practice at OSF, are discussing combating hospital readmissions to improve health system and patient outcomes. 

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Highlights of this episode include:

  • Some of the challenges as OSF
  • High readmission rate risks
  • Financial implications that are associated with hospital readmissions
  • Implementing strategies

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome both Dr. Ahzam Afzal and Matt Nieukirk. Dr. Afzal stands out as a healthcare innovator, having spent over a decade pioneering value-based care initiatives. As the co-founder and CEO of Puzzle Healthcare, he’s at the helm of a leading national company focused on post-acute care coordination and preventing hospital readmissions. Puzzle Healthcare has earned accolades from some of the country’s most prestigious healthcare systems. Not only for its outstanding patient results, but also for enhancing care delivery and minimizing readmission rates. Matt Nieukirk has been the Director of Skilled Nursing Practice at OSF for the last six years. He’s been a licensed nursing home administrator for the last 33 years and has had extensive experience running skilled facilities for many organizations. The focus for OSF and its current practice is to help reduce length of stays in hospital settings and reduce rehospitalizations for the health system. OSF currently partners with Puzzle Healthcare to reduce rehospitalizations in its 60-plus nursing homes. In this episode, we’re discussing combating hospital readmissions to improve health system and patient outcomes. Welcome and thank you for joining us today, Dr. Afzal and Matt.

Dr. Ahzam Afzal: Thanks for having us.

Matt Nieukirk: Yes, thank you.

Kelly: Well, let’s go ahead and jump in. The first question is directed to Matt. Could you provide us with some background on your work at OSF and some of the challenges your team has been faced with recently?

Matt: Absolutely. So OSF is a health system in basically central and northern Illinois. We currently own about 17 hospitals throughout our entire system. About 11 years ago, we started a SNF practice, a skilled nursing practice that we employed physicians, APNs, and then a back office staff that were following patients as they discharged from the hospital into skilled facilities to really help with readmission rates, length of stays in the skilled facilities, as well as ED visits back to the hospital. One of the things that we really experienced during the pandemic was our numbers prior to the pandemic were significantly higher. A lot of patients were choosing to go to skilled facilities during the pandemic. And post-pandemic we saw a significant decline in those things. And one of the biggest things that we really needed to do was as we discharged to probably anywhere between 70 and 100 nursing homes throughout our entire ministry, we really needed to have a bigger footprint on impacting those nursing facilities. With my SNF practice, at that time, I had about six APNs that were rounding in about 22 to 25 facilities. So, we really were not having a big enough impact or a big enough footprint to really impact those readmission rates, the length of stays, and the patients going back to the hospital.

Kelly: Thank you for sharing that with us, Matt. This one’s over to Dr. Afzal. What are some of the risks stemming from a health system having a high readmission rate, both for the patients and the hospital?

Dr. Afzal: Yeah, so high readmission rates… they pose significant risks to both patients as well as the hospitals, impacting health outcomes, financial stability, and really just the overall quality of healthcare. So just diving deeper into it. So, for patients, the primary thing is really just worsened health outcomes. And patients with frequent readmissions may experience a decline in their health status, and each hospital stay carries risks such as hospital acquiring infection, increased stress, and the potential for medication errors, which can really complicate or slow the recovery process. And then also from a cost perspective, the increase healthcare costs for our patients that are readmitted is a big concern as well. And high readmission rates can lead to these increased out-of-pocket expenses for patients, costs associated with additional treatments, hospital stays, medications. And this financial burden can be significant, especially for those with chronic conditions requiring ongoing care. And then from a psychological perspective, the cycle of readmissions can take a toll on a patient’s mental health, leading to the feelings of frustration, anxiety, depression, and that stress of the repeated hospitalizations can affect both patients as well as their families, impacting their overall well-being and the quality of life.

And then from a hospital perspective, as really as part of the efforts to improve healthcare quality and reduce unnecessary spending, hospitals with high readmission rates face significant financial penalties from Medicare and other insurers. And these penalties can amount to substantial revenue losses affecting a hospital’s ability to invest in improvements and innovation, etc. And then from a reputational perspective, high readmission rates can damage a hospital’s reputation, making it less attractive to patients, seeking care and to healthcare professionals considering employment opportunities as well. And that reputational impact can have pretty long-term consequences for patient volumes and the hospital’s competitive position in that respective market. And then from a resource strain perspective, high readmission rates constrain hospital resources, including bed availability, which is a key driver, of course, with length of stay, also affects staffing and equipment. And this could lead to longer wait times for treatment, reduce capacity to admit new patients, and potentially compromise the quality of care provided to all patients. And from a quality of care perspective, tying it back into that, high readmission rates often trigger scrutiny from many regulatory bodies, accreditation organizations, which could lead to sanctions or need for a corrective action plan. And this scrutiny can also compel hospitals to reevaluate and improve their care coordination, discharge planning, and patient education efforts.

Kelly: Yeah, those risks sound significant. Can you explain what, if any, financial implications are associated with hospital readmissions and how lowering these rates would benefit a health system like OSF?

Matt: Absolutely. So, hospitals are usually penalized. When they have a higher readmission rate, they look at them at a yearly rate. And they’re penalized between a 1 and 3% penalty for readmission rates during that year. So, health systems can be penalized. I mean, OSF was penalized upwards of $170 million back in 2022. And the issue that we really run into is when you’re not controlling your readmissions and these patients are bouncing back to the hospitals, whether it’s from home or whether it’s from a skilled facility, the problem that the hospitals run into is you’re not able to bring in new patients. And new patients are where the revenue comes from. So again, with readmission rates, you’re being penalized from Medicare, but then also those readmission patients are actually sitting in a bed and not allowing us to admit new patients into the facility at that time. So, there are quite a few implications when we run into high readmission rates. And so that’s what we’re trying to control on the backend right now.

Dr. Afzal: And if I could add, I’ll add to that component as well, just because we’ve seen the Hospital Readmission Reduction Program is what Matt’s referring to. That penalty system was established back in 2012 through the Affordable Care Act. And hospitals can face up to that 3% penalty of their Medicare reimbursements, which can amount to the penalties that Matt was stating. But building on that framework established by the HRRP and other value-based purchasing programs, in 2024, there was a new program called the SNF Value-Based Purchasing Program, which represented a pretty key shift in how skilled nursing facilities are reimbursed for their services. And that program started to introduce financial penalties, as well as rewards based on the facility’s performance on certain equality measures, with a particular focus on hospital measures as well as hospital readmission. So, the goal, as you can kind of see now, is, yes, hospitals are getting penalized, but now that penalty is now extending out into the post-acute care sector within the skilled nursing facilities. And when you look at the primary measure for the SNF value-based purchasing program, they’re really looking at the rate of hospital readmissions within 30 days of discharge from the SNF stay. And that measures assessing the facility’s effectiveness in preventing readmissions by providing high-quality care, including appropriate management of the medications, ensuring that timely follow-up care, and that education that happens with their patients and their families about how to manage their conditions after discharge. So, there are financial incentives and penalties, and there are adjustments to Medicare payments to skilled nursing facilities as well based on their performance under this value-based purchasing program.

Kelly: Very interesting. Thank you both for sharing that. Back to you, Dr. Afzal. How are you and your team working with OSF to reduce these readmission rates and ultimately save them money?

Dr. Afzal: That’s a good question. So, we are Puzzle of Healthcare. So, we are a readmission prevention company. And our team has been embedded in value-based care for the last decade. So, when we engage with the health system, we take a pretty close look at readmission penalties for the system in its entirety. And typically, what we find is that a high proportion of these readmissions are coming from the post-acute space as there are sicker and higher acuity patients being discharged to a SNF. And the problem for hospitals, though, is that they don’t have clear visibility as to what happens to their patients once they leave the hospital and enter into the SNF. And the only time they hear about that patient again is when they end up back in their ED as a result of that readmission. And additionally, most of these health systems will leverage a post-acute preferred network of SNFs that they discharge our patients to based on quality measures. Still, even with having this in place, SNF readmission rates are very high due to SNF staffing challenges, which results in inadequate discharge planning. Oftentimes, you have one social worker that’s responsible for all of the patients in the facility, and it becomes very challenging for a SNF to check in with a patient and see how they’re doing post-discharge. And if it is happening, it’s usually not happening in a meaningful way to target those potential exacerbations.

So, where Puzzle comes in is we work very closely and collaborate with the health systems to engage their post-acute SNF partners and implement our readmission prevention program, which couples physiatry and care coordination. And we deploy physiatrists as the quarterback of care in the SNF as they are the ones that are typically evaluating those patients that are at highest risk for readmission. And that’s coupled with a multidisciplinary virtual care management team that’s comprised of disease-specific care managers that follow the patient from the point of hospital discharge through the SNF admission, through the entirety of the SNF stay, and for a period of 90 days post SNF discharge. And then post-discharge, when the patients are home, our care managers will connect with every patient that leaves the SNF and will go through disease-specific assessments that are designed to identify exacerbations and get a clear subjective picture as to how the patient is doing and if there are any exacerbation risks. And then additionally, for our high-risk patients, we deploy remote patient monitoring sensors that help us track in real time heart rate, respirations, movement, activity levels. So now when our care managers are reaching out to, let’s say, Mrs. Smith, for example, we can say we’ve noticed she hasn’t been out of bed in a couple of days, or we’re noticing that trends that would indicate a readmission risk. And then with our health system partners like OSF, we develop readmission avoidance pathways that will triage patients to the appropriate site of care to mitigate a readmission. And then bringing it all back together, all the work that we do is aggregated into a post-discharge tracker that risk stratifies all patients that have been discharged. And that’s shared with the health systems, it’s shared with the SNFs, and discussed during readmission meetings, which is a great tool to drive awareness, as well as behavioral change at the health system and also the SNF level.

Kelly: Wow, that’s quite impressive. So Matt, has your team at OSF seen any notable results since implementing some of these strategies we just discussed?

Matt: Yeah, great question. Since we have partnered with Puzzle, as I mentioned earlier, when I ran the SNF practice for OSF, we were in 22 to 25 facilities. By partnering with Puzzle and we’re now ranging or averaging 60 to 65 nursing homes that we actually have Puzzle in and partnering with those facilities across our entire ministry. I think one of the big things to point out here is the national average for CMS for readmission rates in a skilled facility is around 29%. And since we have been partnered with Puzzle, our readmission numbers have dropped drastically. We’re seeing for patients that are leaving the hospital and going to the skilled facilities, within that first 30 days of discharge from the hospitals, we’re seeing a readmission rate of below 6%, which is absolutely fantastic.

The other advantage of having Puzzle as our partner is, it was mentioned earlier, they not only follow the patients in the skilled facilities, but then they also have case management that’s following those patients the post 90-day discharge. And really there too, we are seeing huge numbers drop. Our readmission rate for those patients discharging from the skilled facility and going out 90 days is about 9%. So, I mean, that’s just absolutely fantastic numbers with the kind of partnership that we’re doing and those types of numbers that we’re getting is absolutely fantastic. And by doing that, of course we’re saving money, not only for the health system, but hopefully, as Dr. Afzal mentioned earlier, these nursing homes will start to see as they’re being penalized for readmission rates, we’ll hopefully be able to help them as well with this partnership and being able to provide these lower readmission rates back into the hospital. So, this partnership has been an absolutely fantastic thing for us to endeavor in and move forward with. Yes.

Kelly: That sounds like a fantastic partnership indeed. So Matt, let’s keep with you. What are some other tactics that could help reduce readmission rates that our audience should keep in mind?

Matt: I think some of the things when we’re talking about it is that open communication with the APNs, leadership, hospital executives to assure these readmission rates are as low as possible. I think we’ve got to constantly work on making sure that we’re continuing to build those relationships with the nursing homes. One of the biggest things that we have started over the last several months is we now have weekly readmission meetings with our skilled facilities. So, every week, we are on the phone with clinical staff, not only from Puzzle, but also the hospital staff and then the skilled facility. And really what we’re focusing in on are the previous week’s readmissions. And we really start to look for trends that are happening and seeing how we can really help keep those patients from being readmitted to the hospital. Is that something that we can help with training with the skilled facilities? Maybe it’s an error that the hospital found out. We may have discharged the patient too soon, and we really need to start looking at those types of things. So, I think when you start building these partnerships not only with the skilled facilities, but you have a company like Puzzle coming in and really being that extension of the hospital systems, it has just been positive growth for us. And we’re excited to see these numbers can continue to go lower and lower as we move into the future.

Kelly: That’s great. Let’s also hear from Dr. Afzal on this topic. What are some tactics that you have that you can share with our audience?

Dr. Afzal: Yeah, for sure. I think really the main thing we think of is along the lines of what Matt said, and I’ll touch on that in a second. But first, I think it’s really looking at it from the get-go and being able to leverage different predictive analytic tools that enable us to go through a ton of patient data to identify those patients that are at high risk for readmission. So, it’s not just about medical histories or previous admissions, it’s including variables like social determinants of health, medication adherence patterns, and even behavioral health indicators. And by flagging high-risk patients before they’re discharged, we can tailor our post-discharge plans significantly to ensure that we’re mitigating those readmission risks and really triaging that level of follow-up based on that. And then really, when you think of the patient education process, we really want to make sure that when patients are getting discharged, there’s the right education and the right platforms being utilized to ensure that patients truly understand their hospitalization and what actually occurred. And that’s key in making sure that patients have the information they need post-discharge to understand their condition better. And when you’re looking at a health system, I think it’s imperative to take a look specifically at when you’re looking at your readmissions, what percentage of those readmissions are coming from the post-acute sector. Because inevitably, those are the sicker patients and the higher acuity patients and those more complex DRGs that are attributing to those readmissions. And once you identify that and taking that out to the skilled nursing facilities, it’s along the lines of what Matt said. It’s being able to facilitate these regular strategic meetings with these post-acute partners for each of these health systems, including the skilled nursing facilities, the home health agencies, the rehabilitation centers.

And these meetings are critical for a number of reasons. But first and foremost, is being able to share data and insights and gain from predictive analytics and the patient monitoring. All of these parties can now identify trends and risk factors associated with readmissions. And this collaborative approach enables a much more unified understanding of the challenges and opportunities for improvement. And it also gives the group a platform to discuss individual case studies. And these regular meetings offer an opportunity to discuss specific case studies of readmissions, allowing partners to analyze what went well, what could have been improved. And that case-by-case review helps in identifying actionable strategies that can be implemented to prevent future readmissions. And then from a coordination of care perspective, the care transitions and having effective care transitions are crucial to preventing readmissions. And these meetings allow for the discussion and more so the refinement of these transition protocols, ensuring that these patients receive seamless continuous care as they move from acute to post-acute to home settings. And I think that’s really the way that we’re able to tackle that problem across the board. So, I think from our perspective, where our goal is not only being advocating with these facilities, but being able to collaborate and hold these collaborative meetings, provide the necessary tools, the platforms, the data and expertise to lead a lot of these meetings with the post-acute partners in collaboration with the system to ensure that they’re productive. And I think one thing that collectively we all realize is that reducing readmissions is a shared responsibility. And these meetings serve as a cornerstone and more of a comprehensive strategy to enhance patient outcomes and strengthen the healthcare system’s efficiency and effectiveness.

Kelly: Appreciate you both sharing those ideas with us. And thank you both so much for joining us and for sharing your insights on combating hospital readmissions to improve health system and patient outcomes. Thanks again.

Matt: Thank you so much, Kelly, for having us.

Kelly: Yes, and if a listener wants to learn more or contact you to discuss this topic further, how best can they do that? Let’s start with Matt.

Matt: Sure. My name is Matt Nieukirk and I’m with OSF Health Systems. I’ll give you my email address. It’s Matthew M-A-T-T-H-E-W dot S dot Nieukirk N-I-E-U-K-I-R-K at

Kelly: Thanks, Matt. What about you, Dr. Afzal?

Dr. Afzal: Could send an email out to info. So, I-N-F-O info at

Kelly: Wonderful. Thank you both for sharing those with us. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of the Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.


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