How Care Management Platforms Can Cut Unnecessary Hospital Costs

Healthcare systems aren’t broken, but how we manage care is. For decades, the solutions to rising healthcare costs have been the same: build more infrastructure, hire more professionals, and increase budgets. Yet year after year, the numbers keep climbing, with the Centers for Medicare & Medicaid Services (CMS) expecting healthcare costs to reach $6.8 trillion by 2030.

A significant proportion of these healthcare costs is lost to preventable hospitalizations, avoidable readmissions, and poor management of chronic diseases. The problem isn’t a lack of care but the way it is being coordinated and delivered. This is where care management platforms are making a difference. These tech-driven solutions address the inefficiencies existing at the core of modern healthcare delivery. By centralizing patient information and enabling real-time communication among providers, care management can potentially reduce hospital costs in healthcare and improve outcomes. 

Let’s discuss how care coordination platforms are driving sustainable, value-based care. 

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The Rising Urgency to Reduce Hospital Costs in Healthcare

Hospital costs are rising faster than ever, placing immense strain on healthcare systems struggling to keep up. Here’s what we know:

• Despite investing twice per capita in healthcare as compared to its peer nations, the country is seeing worse outcomes, especially since post-COVID-19. 
• Hospital operating expenses rose 5.1% in 2024 and still remain elevated in 2025. Persistent issues such as ongoing labor shortages, rising wages, and supply chain disruptions continue to raise healthcare costs. 
• Hospital delays in discharging patients to post-acute care have doubled for MA patients compared to Traditional Medicare, further increasing inpatient length of stay and costs.
• Emergency department spending for conditions like heart failure and diabetes has risen sharply, increasing hospital resource use and intensity.
• Medicare and Medicaid are paying only 83 cents for every dollar spent, leaving hospitals to absorb $130 billion in unpaid costs each year as more patients rely on government programs, creating financial pressure on hospitals. 

These observations call for an intervention, one that focuses on optimizing financial spending and the adoption of tech-driven care coordination solutions.

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Why Traditional Care Approaches Fail to Cut Costs

Traditional care models, revolving around manual coordination and siloed patient information, fail to keep up with the rising demands of modern healthcare. At the center of this struggle are care managers,  tasked with guiding patients through complex care journeys. One of the biggest barriers they face is the lack of integration between different information systems. 

Care managers often have to switch between platforms like EHRs, health information exchanges, and more, just to gather basic patient information. The manual effort required to transfer data across systems can increase the risk of delays and errors, especially during critical transitions of care. 

Additionally, access to the latest and accurate patient information is often unreliable. Care managers struggle to perform essential tasks such as verifying follow-up appointments or understanding the social factors influencing patient health, crucial for preventing readmissions and ensuring safe care transitions. 

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Let’s imagine this in a healthcare facility. A care manager trying to coordinate care for a diabetic patient after discharge has to confirm the patient’s medication list by checking the EHR. But the EHR lacks pharmacy updates. She then logs into a separate platform for recent lab results and calls the primary care clinic to verify follow-up appointments. Meanwhile, she still doesn’t know if the patient has someone at home to assist with daily care or medications. By the time everything is pieced together, the window for intervention has passed. 

What does this lead to? Higher hospital costs and poorer patient outcomes. If the care manager had a chronic care management software, she would have immediate access to the patient’s clinical history, follow-up needs, and risk factors. Even more importantly, the platform could have identified the patient’s lack of caregiver support and helped connect them with the needed social services.

Thus, without integrated and real-time tools,  traditional approaches to care management will continue to fall short in delivering cost-effective, coordinated care.

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How Care Management Platforms Drive Healthcare Cost Reduction Solutions

Care management solutions aren’t just another fancy tool for administration. By creating a unified patient view, streamlining workflows, automating repetitive tasks, and enhancing communication, these solutions enable organizations to save millions of dollars. Features such as task management, automated reminders, and secure messaging are improving care team coordination and patient engagement. Thus, no more combing through fragmented EHRs or manual discharge tracking.

The impact isn’t just theoretical. A leading Iowa-based health system partnered with Innovaccer to implement an automated care management solution with Transitional Care Management (TCM) protocols. This helped reduce 30-day readmissions to just 9.9%, compared to 14.6% without outreach. The health system saved $890K in avoided readmission costs in just five months, with an annualized impact of $2.3 million. 

The results speak for themselves. Care coordination platforms are enabling providers to connect the dots in a patient’s care journey and deliver on the promise of value-based care.

Choosing the Right Care Management Platform: What Healthcare Leaders Must Evaluate

As per the latest reports, the global market for care management software is projected to reach $21.6 billion by 2026. With so many solutions claiming to be the best, identifying the right fit can be overwhelming for healthcare leaders. 

Choosing the wrong platform can mean wasted investment, poor provider adoption, and low impact on outcomes. 

Here are the five essential factors you should consider while selecting a solution:

• Interoperability: The chosen platform must integrate seamlessly with your existing systems, including EHRs, lab tools, and telehealth platforms. True interoperability ensures a unified patient record, eliminating data silos. 

• Automation and workflow intelligence: Look for tools that help your organization reduce manual tasks with smart automation, such as alerts for missed appointments and pre-built care plans for chronic conditions. 

• SDoH and community integration: Evaluate if the platform can identify social risk factors and connect patients to community-based organizations (CBOs). This is crucial for reducing readmissions and improving outcomes. 

• Scalability and customization: A one-size-fits-all solution doesn’t work in healthcare. The ideal platform should support a range of care programs, from chronic care to transitional care, while allowing you to customize as per organizational needs. 

• Analytics and reporting: Your platform should offer actionable insights into performance metrics such as readmission rates, patient engagement levels, and cost savings. It is important to verify the presence of built-in analytics that empower continuous improvement.

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Transforming Healthcare Economics with Care Management Solutions

Beyond redefining hospital readmission reduction strategies or trimming operational costs, care management platforms represent a broader shift in how healthcare is measured and delivered. As regulatory frameworks like the CMS Innovation Models push toward value-based reimbursement, organizations equipped with modern care management software are in a better position to adapt. Unlike transactional models that simply manage costs, care management allows for operationalizing data transparency, value-based risk stratification, and outcomes tracking. All of this is essential for driving sustainable change at the population level.

In the years to come, care coordination platforms will do more than solve today’s problems. They’ll enable the creation of new care delivery systems, smarter public health strategies, and more equitable access to care.

‍Discover how a care management solution can optimize care delivery and financial spending. Get in touch with us.