Recent US legislation imposes financial penalties on hospitals with excessive patient readmissions. Predictive analytics for hospital readmissions have seen an increase in research due to the passage of this legislation. However, many current systems ignore the formulas used by the Centers for Medicare and Medicaid Services for imposing penalties. This research expands upon current methodologies and directly incorporates federal penalization formulas when selecting patients for which to dedicate resources.

Hospital discharge summaries are structured using clinical natural language processing techniques. Naïve Bayes classifiers are then used to assign a probability of readmission to each patient. Hospital Readmission Reductions Program formulas and probability of readmission are applied using four readmission scenarios to estimate the cost of readmission. The highest cost patients are identified and readmission mitigation efforts are attempted.

The results show that the average penalty savings over currently employed binary classification to be 51.93%. Binary classification is also shown to select more patients than necessary for readmission intervention. Additionally, intervening in only high-risk patients saved an average of 90.07% compared to providing all patients with costly aftercare.

Focusing resources toward the potentially most expensive patients offers considerably better results than unfocused efforts. Utilizing direct calculation to estimate readmission costs has shown to be a more efficient use of resources than current readmission reduction methods.