Medicare hospital payment by diagnosis-related groups

Day Admission Surgery Program in a Prospective Payment System: What Are the Financial Incentives?

Background

Day admission surgery (DAS) is meant to provide a better in-hospital experience for patients and to save costs by reducing the length of stay. However, in a prospective payment system, it may also reduce the reimbursement amount, leading to unintended incentives for hospitals.

Methods

Over a 4-month period in 2021 and based on predefined clinical and logistic criteria, patients from different surgical sub-specialties were identified to follow the institutional DAS program. Revenue-analysis was performed, considering the Swiss diagnosis-related group (SwissDRG) prospective payment policy. Revenue with DAS program was compared to revenue if patients were admitted the day prior surgery (No DAS) using nonparametric pooled bootstrap t-test. All other costs considered identical, an estimation of the average cost spared due to the avoidance of pre-operative hospitalization in the DAS setting was carried out using a micro-costing approach.

Results

Overall, 105 inpatients underwent DAS over the study period, totaling a revenue of CHF 1 209 840. Among them, 25 patients (24%) were low outliers due to the day spared from the DAS program and triggering a mean (SD) financial discount of Swiss Francs (CHF) 4192 (2835), yielding a total amount of CHF 105 435. DAS revealed a mean revenue of CHF 7320 (656), compared to CHF 11 510 (1108) if patients were admitted the day before surgery (No DAS, P = .007).

Conclusion

In a PPS, anticipation of financial penalties when implementing a DAS for all-comers is key to prevent an imbalance of the hospital equation if no financial criteria are used to select eligible patients. Promptly revising workflow to maintain constant fixed costs for a greater number of patients may be a valuable hedging strategy.

Exploring the differences in ICD and hospital morbidity data collection features across countries: an international survey

BACKGROUND

The International Classification of Diseases (ICD) is the reference standard for reporting diseases and health conditions globally. Variations in ICD use and data collection across countries can hinder meaningful comparisons of morbidity data. Thus, we aimed to characterize ICD and hospital morbidity data collection features worldwide.

METHODS

An online questionnaire was created to poll the World Health Organization (WHO) member countries that were using ICD. The survey included questions focused on ICD meta-features and hospital data collection systems, and was distributed via SurveyMonkey using purposive and snowball sampling. Accordingly, senior representatives from organizations specialized in the topic, such as WHO Collaborating Centers, and other experts in ICD coding were invited to fill out the survey and forward the questionnaire to their peers. Answers were collated by country, analyzed, and presented in a narrative form with descriptive analysis.

RESULTS

Responses from 47 participants were collected, representing 26 different countries using ICD. Results indicated worldwide disparities in the ICD meta-features regarding the maximum allowable coding fields for diagnosis, the definition of main condition, and the mandatory type of data fields in the hospital morbidity database. Accordingly, the most frequently reported answers were "reason for admission" as main condition definition (n = 14), having 31 or more diagnostic fields available (n = 12), and "Diagnoses" (n = 26) and "Patient demographics" (n = 25) for mandatory data fields. Discrepancies in data collection systems occurred between but also within countries, thereby revealing a lack of standardization both at the international and national level. Additionally, some countries reported specific data collection features, including the use or misuse of ICD coding, the national standards for coding or lack thereof, and the electronic abstracting systems utilized in hospitals.

CONCLUSIONS

Harmonizing ICD coding standards/guidelines should be a common goal to enhance international comparisons of health data. The current international status of ICD data collection highlights the need for the promotion of ICD and the adoption of the newest version, ICD-11. Furthermore, it will encourage further research on how to improve and standardize ICD coding.

Predicting Discharge Diagnoses Using a Computerized Preadmission Screening Tool

The authors integrated into an existing hospital information system a preadmission screening system, intended to reduce payment denials and reimbursement shortfalls that result from improperly classifying the billing status of patients. They report the results of efforts to validate the expert system upon which the preadmission screening system is based.

Improved Comorbidity Capture Using a Standardized 1-Step Quality Improvement Documentation Tool

Objective

To assess the impact of implementation of a “1-step” documentation query system on comorbidity capture and quality outcomes within the Department of Otolaryngology–Head and Neck Surgery.

Methods

Implementation of the 1-step documentation query system was instituted for all otolaryngology–head and neck surgery faculty at a single institution. Individual query responses and impact metrics were analyzed. Departmental case-mix index (CMI), risk of mortality (ROM), and severity of illness (SOI) were collated over a 14-month implementation period and compared to a 12-month preimplementation period.

Results

A total of 226 documentation queries occurred during the program pilot period, with an 86.7% response rate. Of queries with a response, 91.0% resulted in a significant impact for the hospitalization diagnoses-related group, ROM, or SOI. Departmental CMI increased from 2.73 to 2.91 over the implementation period, and observed/expected mortality ratio decreased from 0.50 to 0.42 pre- to postimplementation.

Discussion

With increasing emphasis on quality metrics outcomes within the United States health care system, there is a need for institutions to accurately capture the complexity and acuity of the patients they care for. There was a positive change in quality outcomes metrics, including ROM, SOI, and CMI over the first year of deployment of the 1-step documentation query process.

Implications for Practice

Clinical severity metrics are becoming increasingly important to otolaryngologists, as insurers move to severity-adjusted profiles. The 1-step documentation query process provides a reproducible and effective way for clinical documentation specialists and physicians to collaborate on improving departmental clinical severity metrics.

Risk Factors for Hospital Admission in Elderly Public Housing Tenants

To identify potential risk factors for hospital admission, we interviewed elderly (range: 62-94; mean = 74.6 years) public housing tenants using a broad-based assessment instrument. Persons reporting more depressive symptoms, worse physical health, and decreased ability to perform physical self-maintenance activities were hospitalized nearly twice as frequently in the one year subsequent to the baseline interview. We conclude that traditional health status measures are better predictors of hospital admissions than social factors. By identifying high-risk patients, health care professionals may be able to intervene in the outpatient setting to reduce patients' use of expensive inpatient care.

Diagnosis-Related Groups: Past and Future

Introduction of the diagnosis-related group (DRG)-based Medicare Prospective Payment System is one of a series of major innovations that has occurred in the payment and delivery of health care over the past ten years. Changes such as the increased prevalence of health maintenance organizations, preferred provider organizations, third-party utilization review programs, and the peer review organizations for Medicare patients have all altered the way health care is financed and delivered. The DRG-based Medicare Prospective Payment System is the most visible of these changes, given its breadth of application and its radical departure from the previous retrospective reimbursement for hospital care. The Medicare Prospective Payment System has been in effect since October, 1983. As we approach the fifth anniversary of this program, it is a good time to review its history and to make some judgments as to its future.

Using risk adjustment approaches in child welfare performance measurement: Applications and insights from health and mental health settings

Federal policymaking in the last decade has dramatically expanded performance measurement within child welfare systems, and states are currently being fiscally penalized for poor performance on defined outcomes. However, in contrast to performance measurement in health settings, current policy holds child welfare systems solely responsible for meeting outcomes, largely without taking into account the effects of factors at the level of the child, and his or her social ecology, that might undermine the performance of child welfare agencies. Appropriate measurement of performance is predicated upon the ability to disentangle individual, as opposed to organizational, determinants of outcomes, which is the goal of risk adjustment methodologies. This review briefly conceptualizes and examines risk adjustment approaches in health and child welfare, suggests approaches to expanding its use to appropriately measure the performance of child welfare agencies, and highlights research gaps that diminish the appropriate use of risk adjustment approaches - and which consequently suggest the need for caution - in policymaking around performance measurement of child welfare agencies.

Determinants of resource utilization in four palliative care units

OBJECTIVE

To assess resources mobilized per day and per patient receiving palliative care (PC) and to explain the observed cost variability.

STUDY SETTING

We conducted a prospective study in four French PC units.

STUDY DESIGN/DATA COLLECTION

For each patient, socio-demographic and medical data were collected (using a case-report form developed specifically for this purpose) and a daily cost for the provision of care was estimated. Three methods were used to analyse causal relationships. The first method was to ask the PC staff, individually and in group meetings, their own perception of the relationship between daily costs and the other variables; the remaining two methods used the data collected in the prospective study: correlational analysis and segmentation. The database contained 140 hospitalization sequences.

PRINCIPAL FINDINGS

The daily cost per patient was, on average, Euro 434 (standard deviation: Euro 73) and ranged from Euro 301 to Euro 667. Beyond differences in resources between PC units in this study, six variables were predictive of higher costs: degree of anxiety of patients and/or their families; proximity of death; extreme dependence; ENT cancer; relatively young age of the patient; and provision of certain procedures (drip, syringe driver, aspiration, oxygen therapy).

CONCLUSIONS

These elements suggest using, not a single rate to finance this type of care, but modifying this tariff according to the characteristics of the patients. They raise the question about the criteria to be used if such a step were to be taken.

Developing an operational typology of patients hospitalised in palliative care units

The objective of this study was to develop an operational typology of patients hospitalised in palliative care units (PC units) and to characterize these populations. Prospective data were collected in four PC units over three-week periods, generating a sample of 139 cases. Five classes of patient were identified and described via a factorial analysis and a classification: metastatic cancers requiring significant psychological attention, terminally ill patients, ENT cancers, neurological diseases and elderly patients. A more detailed study revealed differences between metastatic cancers, younger patients, very dependent patients and the other patients. We present the sociodemographic, clinical and cost per patient profiles of each class of patient. Having access to a broader sample of PC units and of patients would allow for a more complete typology.

Diagnosis-Related Group–Adjusted Hospital Costs Are Higher in Older Medical Patients with Lower Functional Status

OBJECTIVES

To determine whether hospital costs are higher in patients with lower functional status at admission, defined as dependence in one or more activities of daily living (ADLs), after adjustment for Medicare Diagnosis-Related Group (DRG) payments.

DESIGN

Prospective study.

SETTING

General medical service at a teaching hospital.

PARTICIPANTS

One thousand six hundred twelve patients aged 70 and older.

MEASUREMENTS

The hospital cost of care for each patient was determined using a cost management information system, which allocates all hospital costs to individual patients.

RESULTS

Hospital costs were higher in patients dependent in ADLs on admission than in patients independent in ADLs on admission ($5,300 vs $4,060, P<.01). Mean hospital costs remained higher in ADL-dependent patients than in ADL-independent patients in an analysis that adjusted for DRG weight ($5,240 vs $4,140, P<.01), and in multivariate analyses adjusting for age, race, sex, Charlson comorbidity score, acute physiology and chronic health evaluation score, and admission from a nursing home as well as for DRG weight ($5,200 vs $4,220, P<.01). This difference represents a 23% (95% confidence interval=15-32%) higher cost to take care of older dependent patients.

CONCLUSION

Hospital cost is higher in patients with worse ADL function, even after adjusting for DRG payments. If this finding is true in other hospitals, DRG-based payments provide hospitals a financial incentive to avoid patients dependent in ADLs and disadvantage hospitals with more patients dependent in ADLs.

The economic benefit of organizational restructuring of the cardiothoracic intensive care unit

OBJECTIVES

Compare cost/benefits of organizational restructuring of the cardiac intensive care unit (CICU).

DESIGN

Prospective, with a retrospective control period.

SETTING

Academic medical center.

PARTICIPANTS

Sixty-six CICU patients (prospective) and 57 patients who received care before restructuring (retrospective) were compared. Entrance criteria were constant for both study periods.

INTERVENTIONS

The CICU was restructured from a level III ICU to a level I ICU with the initiation of a consultant CICU service. The CICU service provided an attending physician dedicated to ICU care daily. All cardiac patients admitted into the CICU received consultation by the CICU service.

MEASUREMENTS AND MAIN RESULTS

The average postoperative intubation time decreased during the intervention period (61% extubated within 6 hours v 12%, p = 0.004). Pharmacy, radiology, laboratory, and ICU costs decreased 279 US dollars (p = 0.004), 196 US dollars (p = 0.003), 190 US dollars (p = 0.15), and 470 US dollars (p = 0.12), respectively. The ICU length of stay (0.28 days shorter) as well as the overall postsurgery stay (0.54 days shorter) were reduced in the intervention period (p = 0.11 and 0.10, respectively).

CONCLUSIONS

The CICU service significantly reduced both total ICU-related costs ($1,173/patient) and overall costs (2,285 US dollars/patient) during the intervention period. Professional fees only reduced overall savings by 8%. These results indicate that organizational restructuring of the CICU to newer models can reduce costs associated with cardiac surgery.

Applying the 3M All Patient Refined Diagnosis Related Groups Grouper to measure inpatient severity in the VA

OBJECTIVES

To assess the severity level of acute inpatient care in the Veterans Health Administration (VA) using the 3M All Patient Refined Diagnosis Related Groups (APR-DRGs) Grouper and compare severity levels in the six study sites with other Veterans Affairs Medical Centers.

METHODS

Acute inpatient stays were generated based on bedsection movement information in VA Inpatient Medical SAS data sets from federal fiscal years 1997 and 1998. All nonacute bedsections were excluded. The APR-DRG Grouper generated APR-DRG and severity level for each acute inpatient stay using relevant VA data in a fixed format. Severity and length of stay (LOS) within each major APR-DRG (those accounting for at least 0.5% of all acute inpatient stays or days) were compared between study sites and other centers using z scores.

RESULTS

Of 315 APR-DRGs, 63 major groups accounted for more than two thirds of all stays and days of care in both years. The study sites were similar in average patient severity and LOS to other centers for most APR-DRGs. For those with significant differences, the six centers had shorter LOS and higher severity. The magnitude of differences was large in LOS and small in severity.

CONCLUSIONS

The study sites are generally representative of the overall VA acute inpatient stays. Some adjustments were needed to reflect that the six sites had relatively sicker patients and lower LOS in some of APR-DRGs when resource utilization estimations in the six sites were generalized to the entire VA system. The severity measure of the 3M APR-DRG Grouper can be adapted to the VA controlling for the complicated nature of VA inpatient care.

From home to hospital and back again: economic restructuring, end of life, and the gendered problems of place-switching health services

Economic restructuring in the health services industry in the USA exemplifies general patterns of economic change propelled by neoliberalism, especially industry privatization, diminished social services, and dependence on "flexible" labor and management regimes. Combined with the widespread entry of women into the labor force, an aging population, and minimal assistance for high quality long-term care at the end of life, these economic and social conditions raise a set of difficult policy questions for health services planning. Set in these broad contexts, this paper situates access to and experience of health services in the home, the hospital, and nursing facility, to demonstrate how economic changes have relocated and redefined health services in ways that distinctively impact how people experience the places where they receive care. This place switching of health services externalizes costs of subacute and "daily life care" (the so-called custodial care) to the sphere of the individual, their family, and communities. The theoretical analysis uses current geographical and philosophical approaches to place and space, and considers the tensions between institutionally managed health care space, and the patient's experience of receiving health services in place. The place/space dilemma of health services provision is examined through several interrelated subjects: long-term care at the end of life, gendered characteristics of care giving, the limitations of Medicare and Medicaid, historical changes in hospital length of stay, the restructuring of nursing practices, and the "no-care zone". The analysis is based on examples of stroke and incontinence care to demonstrate the importance of considering place and space issues in health care planning.

[Probabilistic models of mortality for patients hospitalized in conventional units]

BACKGROUND

We have developed a tool to measure disease severity of patients hospitalized in conventional units in order to evaluate and compare the effectiveness and quality of health care in our setting.

PATIENTS AND METHOD

A total of 2,274 adult patients admitted consecutively to inpatient units from the Medicine, Surgery and Orthopaedic Surgery, and Trauma Departments of the Corporació Sanitària Parc Taulí of Sabadell, Spain, between November 1, 1997 and September 30, 1998 were included. The following variables were collected: demographic data, previous health state, substance abuse, comorbidity prior to admission, characteristics of the admission, clinical parameters within the first 24 hours of admission, laboratory results and data from the Basic Minimum Data Set of hospital discharges. Multiple logistic regression analysis was used to develop mortality probability models during the hospital stay.

RESULTS

The mortality probability model at admission (MPMHOS-0) contained 7 variables associated with mortality during hospital stay: age, urgent admission, chronic cardiac insufficiency, chronic respiratory insufficiency, chronic liver disease, neoplasm, and dementia syndrome. The mortality probability model at 24-48 hours from admission (MPMHOS-24) contained 9 variables: those included in the MPMHOS-0 plus two statistically significant laboratory variables: hemoglobin and creatinine.

CONCLUSIONS

Severity measures, in particular those presented in this study, can be helpful for the interpretation of hospital mortality rates and can guide mortality or quality committees at the time of investigating health care-related problems.

Does clinical evidence support ICD-9-CM diagnosis coding of complications?

BACKGROUND

Hospital discharge diagnoses, coded by use of the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM), increasingly determine reimbursement and support quality monitoring. Prior studies of coding validity have investigated whether coding guidelines were met, not whether the clinical condition was actually present.

OBJECTIVE

To determine whether clinical evidence in medical records confirms selected ICD-9-CM discharge diagnoses coded by hospitals.

RESEARCH DESIGN AND SUBJECTS

Retrospective record review of 485 randomly sampled 1994 hospitalizations of elderly Medicare beneficiaries in Califomia and Connecticut.

MAIN OUTCOME MEASURE

Proportion of patients with specified ICD-9-CM codes representing potential complications who had clinical evidence confirming the coded condition.

RESULTS

Clinical evidence supported most postoperative acute myocardial infarction diagnoses, but fewer than 60% of other diagnoses had confirmatory clinical evidence by explicit clinical criteria; 30% of medical and 19% of surgical patients lacked objective confirmatory evidence in the medical record. Across 11 surgical and 2 medical complications, objective clinical criteria or physicians' notes supported the coded diagnosis in >90% of patients for 2 complications, 80% to 90% of patients for 4 complications, 70% to <80% of patients for 5 complications, and <70% for 2 complications. For some complications (postoperative pneumonia, aspiration pneumonia, and hemorrhage or hematoma), a large fraction of patients had only a physician's note reporting the complication.

CONCLUSIONS

Our findings raise questions about whether the clinical conditions represented by ICD-9-CM codes used by the Complications Screening Program were in fact always present. These findings highlight concerns about the clinical validity of using ICD-9-CM codes for quality monitoring.

[What is the cost of inappropriate admission of pneumonia patients?]

BACKGROUND

The number of patients admitted with community-acquired pneumonia (CAP) varies greatly from one hospital to another. Prognostic models for CAP can help physicians decide which cases to treat on an outpatient basis. Our aims were: a) to validate a model for predicting low-risk CAP, and b) to estimate savings that would have resulted if the low-risk patients identified by the model had been treated at home rather than in hospital.

PATIENTS AND METHODS

All CAP cases diagnosed by the emergency room physicians of a hospital in northwestern Spain (Ferrol) were enrolled prospectively over a period of 19 months. The prediction rule of Fine et al was used to classify all patients. Mortality in each category was compared with the mortality predicted by Fine's system. Patients in the lowest risk categories (I and II) were considered to have been inappropriately admitted unless they were hypoxemic or had significant comorbidity. Costs were figured based on data provided by our accounting department.

RESULTS

Of 192 CAP patients enrolled, 131 were admitted and 61 were treated as outpatients. Ten patients died, none of whom was in classes I or II. The costs of the apparently unnecessary hospital stays of the 34 patients in these classes was 6,979,756 pesetas. The estimated savings that would have derived from treating these patients out-of-hospital was 6,133,292 pesetas (36,862 euros; 322,804 pesetas/month).

CONCLUSIONS

a) The predictive model used has been found useful for identifying patients at very low risk of dying from CAP; b) Using this model can improve CAP admission criteria, and c) Application of the model can lead to savings.

Hospitalization for gastrointestinal and liver diseases: the effect of socioeconomic and medical supply factors

A growing body of research has documented significant variation in health care use between communities. As the health care system is transformed, providers and payers should understand the interaction between a community, its sociodemographic characteristics, and its use of health resources. We describe the association between a population's demographic, socioeconomic, and medical resources and hospital use related to gastrointestinal and liver diseases. We used an all-payer hospital discharge database for Michigan from 1986 to 1988. We identified all medical and surgical hospital admissions during this period from two of the Diagnostic Related Group, Major Diagnostic Categories: No. 6, Diseases and Disorders of the Digestive System; and No. 7, Diseases and Disorders of the Hepatobiliary System and Pancreas. We analyzed age- and sex-specific use rates. Finally, we analyzed the influence of sociodemographic variables from the Area Resource File at the county level, on hospital use, using a Poisson regression model. We noted a significant association between increased hospitalizations and increased age in a community. Hospital beds per capita did not influence admission rates overall, although more hospital beds were associated with more medical admissions. Overall, the total physician supply was associated with more admissions. Finally, the most important socioeconomic variable was education. As the level of education of a county increased, hospital admissions decreased dramatically. The transformation of the health care delivery system presents opportunities and challenges. Understanding the underlying epidemiology of disease and how it interacts with a community's socioeconomic and medical resources or medical supply characteristics will be necessary to meet the community's health needs and to ensure the financial viability of providers. This is especially true when payers use a standard payment in a region, such as Medicare's managed care payment, without adjustments for the underlying population characteristics known to influence use.

[Economic analysis of secondary prevention of coronary heart disease with simvastatin (Zocor) in Germany]

BACKGROUND

Coronary artery disease (CAD) has enormous financial, medical, as well as economical consequences in Germany. Important risk factors include raised total cholesterol and LDL cholesterol blood levels. The 4S Study has demonstrated the clinical effectiveness in the secondary prevention of CAD.

METHOD

Based on the health economics data of this study, we undertook a cost-effectiveness analysis of the secondary prevention of CAD with simvastatin in Germany.

RESULTS

On average, the costs per life year gained were DM 18,500.-(sensitivity analysis: DM 9,340.- to DM 29,374.-). The consequences of this result are discussed.

CONCLUSION

It is necessary from a health economists' point of view to assess the efficiency of a clinically effective measure in a standardised manner. This permits a comparison of efficiency with other, competing forms of health care, which is necessary in areas like CAD where there are different approaches to combat the disease. Simvastatin is highly efficacious in the secondary prevention of CAD in a defined patient population and, in comparison to other interventions in this area, it also proves to be cost-efficient.

The independent pathology laboratory as a reporting source for cutaneous melanoma incidence in Iowa, 1977-1994

BACKGROUND

Health care changes during the past decade have resulted in a greater proportion of cutaneous melanoma (CM) cases diagnosed in nonhospital settings, increasing the potential for cases to be missed by population-based cancer registries.

OBJECTIVE

Our purpose was to assess changes in case-finding sources in Iowa from 1977 to 1994 and to determine the extent of underreporting for the State Health Registry of Iowa, a population-based cancer registry.

METHODS

This study examines changing trends in the incidence of CM and compares case-finding sources (hospitals/clinics, hospital pathology laboratories, and independent pathology laboratories). A survey of dermatologists serving Iowans provides estimates of underreporting.

RESULTS

During the period 1977 to 1994, invasive CM increased 82%, whereas in situ CM increased 900%. The proportion of CM cases diagnosed in independent pathology laboratories increased to 25% of all cases. A range of 10.4% to 17.1% underreporting was estimated based on the survey of dermatologists.

CONCLUSION

To improve the accuracy of surveillance, population-based cancer registries need to make a greater effort accessing pathology reports from nonhospital settings.

Accuracy of administrative data for assessing outcomes after knee replacement surgery

OBJECTIVE

To assess the accuracy of information in an administrative database (Canadian Institute for Health Information; CIHI) compared with the hospital record for patients undergoing knee replacement (KR).

METHODS

A stratified random sample of 185 KR recipients from 5 Ontario hospitals were chosen. Their hospital records and corresponding CIHI files were compared to assess percent complete agreement, false negative (FN) and false positive (FP) rates for demographic data, procedures, and diagnoses.

RESULTS

Of 185 records, 175 (95%) were reviewed. Percent complete agreement was greater than 94% for each of patient demographics and procedures (mean FN rates: 0%; mean FP rates: 0-5%). For comorbidities and complications, although mean percent complete agreement was high, and FP rates were low, mean FN rates were 63% for specific comorbid conditions and 70% for organ systems.

CONCLUSIONS

High FN rates have been found in documentation of comorbidities and in-hospital complications for CIHI data compared with the hospital record. Under-coding of comorbidities and in-hospital complications has potential implications for researchers using administrative databases.

Avoidable morbidity in infants. A classification based on diagnoses in administrative databases

OBJECTIVES

A hierarchical classification for avoidable morbidity in infants was developed based on a conceptual model for causes of morbidity. Experts rated the impact of risk factors and health services on diseases coded according to the International Classification of Diseases, 9th Revision, Classification Modification (ICD-9-CM). An etiologic framework was chosen for the classification because knowledge of etiology often suggests strategies for prevention. Causes of morbidity that cluster on the basis of similar risk factors might be avoided using similar strategies.

METHODS

Diseases (346 different diagnoses) were rated by 16 general pediatricians; 12 attributes were considered, including the impact on disease occurrence and on severity of five risk factors, preventive health services, and medical treatment. Raters evaluated the impact of health services, constitutional risk factors, and environmental risk factors without regard for service site (eg, inpatient, emergency department, primary care office). Environmental risk factors categories, including family, social, and physical environments, were rated separately. The impact of health services was rated on prevention, treatment, and complications of care.

RESULTS

Only ratings indicating that the impact of a risk factor category was substantial were used for the final classification of 275 diagnoses. Consistent with the multifactorial etiology of many diseases, many diagnoses had ratings indicating substantial impact of multiple risk factors. Five mutually exclusive clusters were derived from the 12 ratings based on factor analysis and recognized strategies for prevention. Ordered by level of avoidability, these clusters were termed vaccine-preventable, health-care quality indicators, environmental, environmental/constitutional, and constitutional.

CONCLUSIONS

The usefulness of this classification for policy-oriented epidemiologic and health services research is grounded in the premise that prevention is the cardinal objective of child health policy. Cluster-specific hospitalization rates, ie, rates aggregated for all diagnoses falling in a cluster, might be used for allocating resources to interventions directed at environmental or health service determinants of morbidity. Widespread use of ICD-9-CM codes in hospital discharge and ambulatory databases suggests many potential applications for this classification of morbidity burden in population groups.

Judging hospitals by severity-adjusted mortality rates: the influence of the severity-adjustment method

OBJECTIVES

This research examined whether judgments about a hospital's risk-adjusted mortality performance are affected by the severity-adjustment method.

METHODS

Data came from 100 acute care hospitals nationwide and 11880 adults admitted in 1991 for acute myocardial infarction. Ten severity measures were used in separate multivariable logistic models predicting in-hospital death. Observed-to-expected death rates and z scores were calculated with each severity measure for each hospital.

RESULTS

Unadjusted mortality rates for the 100 hospitals ranged from 4.8% to 26.4%. For 32 hospitals, observed mortality rates differed significantly from expected rates for 1 or more, but not for all 10, severity measures. Agreement between pairs of severity measures on whether hospitals were flagged as statistical mortality outliers ranged from fair to good. Severity measures based on medical records frequently disagreed with measures based on discharge abstracts.

CONCLUSIONS

Although the 10 severity measures agreed about relative hospital performance more often than would be expected by chance, assessments of individual hospital mortality rates varied by different severity-adjustment methods.

Does severity explain differences in hospital length of stay for pneumonia patients?

OBJECTIVES

In the USA, the role of patient severity in determining hospital resource use has been questioned since Medicare adopted prospective hospital payment based on diagnosis-related groups (DRGs). Exactly how to measure severity, however, remains unclear. We examined whether assessments of severity-adjusted hospital lengths of stay (LOS) varied when different measures were used for severity adjustment.

METHODS

The complete study sample included 18,016 patients receiving medical treatment for pneumonia at 105 acute care hospitals. We studied 11 severity measures, nine based on patient demographic and diagnosis and procedure code information and two derived from clinical findings from the medical record. For each severity measure, LOS was regressed on patient age, sex, DRG, and severity score. Analyses were performed on trimmed and untrimmed data. Trimming eliminated cases with LOS more than three standard deviations from the mean on a log scale.

RESULTS

The trimmed data set contained 17,976 admissions with a mean (S.D.) LOS of 8.9 (6.1) days. Average LOS ranged from 5.0-11.8 days among the 105 hospitals. Using trimmed data, the 11 severity measures produced R-squared values ranging from 0.098-0.169 for explaining LOS for individual patients. Across all severity measures, predicted average hospital LOS varied much less than the observed LOS, with predicted mean hospital LOS ranging from about 8.4-9.8 days.

DISCUSSION

No severity measure explained the two-fold differences among hospitals in average LOS. Other patient characteristics, practice patterns, or institutional factors may cause the wide differences across hospitals in LOS.

Using risk-adjusted outcomes to assess clinical practice: an overview of issues pertaining to risk adjustment

Increasingly, health care providers are being evaluated and held accountable for their patients' outcomes, ranging from the costs to service consumption to death. To be meaningful, the outcomes under scrutiny must be important to patients or to the health care system as a whole, relatively common, and linked temporally and causally to the care provided. In addition, outcomes findings should be adjusted for patient risk factors, with the goal of accounting for pertinent clinical characteristics before drawing inferences about the effectiveness or quality of care. Risk adjustment "levels the playing field" in comparing outcomes across providers. Although this concept is straightforward, performing clinically credible risk adjustment is difficult, especially given the widespread data constraints. In this article, I review the major issues involved in performing risk adjustment for health care outcomes studies.

Reducing costs and hospital stay for pneumonia with home intravenous cefotaxime treatment: results with a computerized ambulatory drug delivery system

Studies have documented the efficacy and safety of antibiotic infusion in the home as a cost-effective alternative to in-hospital infusion. The present analysis focuses on home treatment of pneumonia with cefotaxime delivered via an ambulatory infusion pump and the potential of this therapy to reduce the length of hospital stay. Data presented here and in previously published studies of a variety of serious infections show that admitting patients into home intravenous antibiotic therapy programs can significantly reduce, and sometimes eliminate, hospital stay, while providing efficacy and safety comparable to that expected from hospital treatment. Analysis of hospitalization patterns for pneumonia patients placed on cefotaxime therapy delivered via portable infusion pump revealed that length of stay was only 10% of that for the reference diagnosis-related group. Despite the great potential cost savings, there are reimbursement barriers to the use of home infusion antibiotics. However, healthcare reform may promote greater acceptance, use, and support of home infusion technology.

Office-based physician services provided by dermatologists in the United States in 1990

Published epidemiologic data regarding dermatologic practice may no longer be current. The National Ambulatory Medical Care Survey conducted in 1990 provides a comprehensive assessment of ambulatory medical practice including patient demographics, chief and secondary complaints, diagnoses, and drug treatments prescribed. Many specialties including dermatology were represented in the sampling technique. The database was reviewed for descriptive aspects of visits to dermatologists surveyed. Using standardized weighting techniques, we estimated the total number of physician visits. Dermatologists had an estimated 24.0 million patient encounters in 1990. Dermatologists treated a disproportionately large number of female and younger patients. After adjusting for their proportion of the population, Asians and Whites had greater numbers of dermatologic encounters than Blacks and Native Americans. Patients had two or more complaints 27.2% of the time, and received two or more diagnoses 28.9% of the time. The most common complaints accounting for 49.7% of visits included "pimples," "rash," "discoloration," "skin lesion," "wart," and "skin growth." The most common diagnoses, accounting for 52.7% of all encounters, were acne, keratosis, wart, dermatitis or eczema, benign neoplasm, and malignant neoplasm. This paper presents demographic information, chief and secondary complaints, and chief and secondary diagnoses of patients visiting dermatologists in the United States in 1990. Whites and Asian or Pacific Islanders have increased utilization of services compared with Blacks and Native Americans or Eskimos; this disparity correlates with median family income.

Quality assessment in the medical intensive care unit. Continued evolution of a data model

Quality assessment and assurance activities in the intensive care unit are complex processes that begin with the definition of the scope of services delivered in the unit with further identification of the important aspects of care. There is also a need to establish indicators of quality, gather data, and finally to organize the data into useful information. There are many approaches to these efforts ranging from establishment of indicators to data collection and analysis of patterns that lead to clarification of the indicators. We chose the latter pathway, specifically utilizing a previously described data model in which information was grouped according to structure, process, and outcome of patient care. In this paper, we focus on the application of the concept of patient days of service for quantification of the utilization of resources as an element of quality. Efficient utilization of resources cannot be effected until data on actual utilization are collected and analyzed.

Changing patterns of hospital use for patients with musculoskeletal disease in Michigan, 1980 to 1987

Over the past 10 years there have been dramatic changes in health care financing in the United States, such as Medicare's Prospective Payment System for hospitalized Medicare beneficiaries, and in health services delivery, such as the growth in health maintenance organizations and other forms of managed care. These changes have occurred largely in response to payors' concerns about the rising cost of health care. A study of such changes in financing and delivery, and how specific groups of patients are affected is necessary so that the effects of these changes on patients' health can be determined. We examined the hospitalization rates for patients with musculoskeletal diseases in Michigan from 1980 through 1987. During this period, the overall age-adjusted hospitalization rates decreased 7.0% per year (p = 0.001). The decrease occurred less for surgical discharges (6.0% per year) than for medical discharges (8.6% per year) (p < 0.001). While these overall trends are of interest, they obscure disease-specific trends that vary significantly from both the overall, and the medical and surgical trends. For example, while surgical discharges, in general declined, procedures related to major joint and limb reattachment (DRG #209) increased at a rate of 6.3% per year. And while medical discharges in general decreased over this period, discharges for osteomyelitis increased 5.4% per year. The patterns of disease-specific trends offers insight into the possible causes for these changes. Finally, it is important to understand the epidemiology of hospital use to evaluate the effects of new medical care delivery and payment systems on the care of subsets of patients.

Systematic underreporting of cutaneous malignant melanoma in Massachusetts. Possible implications for national incidence figures

An independent tabulation of incidence of cutaneous malignant melanoma in Massachusetts indicates that 12% and perhaps as many as 19% of new cases of cutaneous malignant melanoma in Massachusetts are not recorded in the Massachusetts Cancer Registry, significantly more than the expected 5% (p = 0.0001). The increasing number of nonhospital medical settings in which melanomas can be diagnosed and/or treated appears to account for this discrepancy. We suspect that these findings in Massachusetts also apply to cancer reporting systems in other regions of the United States. We suggest that the true incidence of cutaneous malignant melanoma in Massachusetts, and perhaps in the United States, may be significantly higher than reported.

Dose-response evaluation of oral labetalol in patients presenting to the emergency department with accelerated hypertension

STUDY OBJECTIVE

Dose-response evaluation of oral labetalol (100, 200, or 300 mg) on heart rate and systemic blood pressure in emergency department patients with hypertensive urgency (diastolic blood pressure, 110 to 140 mm Hg, and no end-organ evidence of hypertensive emergency).

METHODS

This acute-treatment, dose-ranging study used a randomized, double-blind, parallel design. Patients with supine diastolic blood pressure of 110 to 140 mm Hg after 30 minutes of bedrest received an oral dose of labetalol. Supine blood pressure and heart rate were measured manually and recorded hourly for four hours after dose. Diastolic blood pressure of 100 mm Hg or less or a 30-mm Hg reduction in diastolic blood pressure was considered a treatment success.

RESULTS

Two hundred fifty-five patients were evaluated for inclusion, and 36 patients (19 women and 17 men; mean age, 44 years; age range, 23 to 67 years) were studied. The most frequent reason for exclusion was a spontaneous decrease in diastolic blood pressure to less than 110 mm Hg (31%) with bedrest. There were 12 patients in each treatment group. Compared with baseline, the 100-mg dose significantly (P less than .05) reduced heart rate at three and four hours after dose, and the 300-mg dose significantly (P less than .05) reduced heart rate at one, two, and three hours after dose; the 200-mg dose did not significantly affect heart rate. All doses produced a significant decrease in systolic and diastolic blood pressures at one, two, three, and four hours after dose compared with baseline. There were no statistically significant differences between treatment groups with regard to systolic or diastolic blood pressure or heart rate at baseline or one, two, three, or four hours after dose. At two hours after dose, diastolic blood pressure control was observed in 75%, 58%, and 67% of patients receiving 100, 200, and 300 mg, respectively (P = .903). At four hours after dose, diastolic blood pressure control was observed in 50%, 64%, and 67% of patients receiving 100, 200, and 300 mg, respectively (P = .755). A comparison of treatment success rates between the two time periods showed a waning of response with the 100-mg dose of labetalol at hour 4 compared with hour 2 (P less than .05). No adverse effects were observed.

CONCLUSION

Labetalol provides safe and effective treatment for hypertensive urgencies when administered orally in doses of 100 to 300 mg.

Health care provision and distributive justice: end stage renal disease and the elderly in Britain and America

Considerations of distributive justice impacting upon the provision of geriatric care and the treatment of patients with end stage renal disease (ESRD) are compared and contrasted between the U.S. and the U.K. Comparisons are drawn from differing degrees of individualist and collectivist idealogies between the two countries and analysis is further developed through use of the concepts of equity, uniformity and public accountability. Notwithstanding the predominance of an individualist ideology in the United States the provision of ESRD services is based on a collectivist format. Geriatric care and other welfare services more directly reflect the differences between collectivist and individualist ideologies in the two countries.

A critique of the Harvard Resource-Based Relative Value Scale

Physician payment reform has assumed a prominent place in the national health policy debate. A key component in this debate is the Harvard Resource-Based Relative Value Scale (RBRVS). The Harvard research effort relied upon several necessary methodologic assumptions and compromises that must be understood to appreciate the RBRVS's strengths and weaknesses. For example, the Harvard group surveyed too few cases to cover the range of clinical practice in a specialty, had too little input in the selection of cases that were judged to be the same or equivalent between specialties, and used an unproven extrapolation methodology to assign final values for total work to non-surveyed physician services. This methodology led to a number of anomalies in the final RBRVS, such as values for comprehensive services for some specialties that were lower for new than for established patients, and total work values for many new patient office services that were lower for Internal Medicine than for Family Practice, a finding inconsistent with empiric evidence. The Harvard RBRVS represents a significant contribution that increases our understanding of physician practice. The system should not be viewed as a finished product. Further investigation and explanation of the assumptions and anomalies are needed to construct a system that reflects adequately the complexity in physician work.

Using administrative diagnostic data to assess the quality of hospital care. Pitfalls and potential of ICD-9-CM

Diagnostic information within administrative data bases is generally in the form of International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) codes. The purpose of this article is to introduce ICD-9-CM, to review its strengths and limitations, and to suggest ways that it can be used through administrative files for assessing the quality of hospital care.

Impact of prospective payment on the role of the diabetes educator

This paper reports the results of a national survey undertaken to explore the impact of prospective payment on the role of the diabetes educator and on diabetes education. Responses were received from 903 individuals--756 diabetes educators and 147 hospital administrators. Study results indicate a need for diabetes educators to more aggressively shape their role and promote the provision of their services to better assure adequate education for those individuals diagnosed with diabetes.

Coping with DRGs--a nursing home's experience

The introduction of prospective payment system (PPS) based on diagnostic related groups (DRGs) has had a significant impact on hospitals. To determine the impact of PPS on nursing homes, the authors studied the activity of a Veterans Administration teaching nursing home (admissions, acute hospital transfers, and discharges) during 1 year preceding implementation of DRGs and for 3 consecutive years following implementation of DRGs. In 1983, pre-DRGs, a total of 36 patients, were admitted to the nursing home. Following implementation of DRGs, a sevenfold increase was noted in the number of patients admitted when comparing 1983 and 1986, with the monthly average of patients admitted increasing from 3 in 1983 to 9.7, 22, and 23.8 in 1984, 1985, and 1986, respectively. Associated with the increase in patients admitted following DRGs was an increase in patients requiring transfer to the acute hospital, within 30 days of admission to the nursing home. In 1986, approximately 27% of patients admitted to the nursing home required transfer to the acute hospital within 30 days of their admission. The number of patients discharged from the nursing home also increased following DRGs. None of the patients admitted to the nursing home in 1983 were discharged within 30 days of admission. Subsequent to introduction of DRGs, an average of two patients per month were discharged within 30 days of nursing home admission.(ABSTRACT TRUNCATED AT 250 WORDS)

Impact of Medicare prospective reimbursement system on nutritional support service patients: the importance of pass throughs

The financial data of all patients (535) admitted to the Nutritional Support Service (NSS) during 1985, including charges, true care costs, and actual reimbursement including pass-through payments (which are Medicare funds given directly to hospitals for education and capital equipment, and vary significantly from hospital to hospital), were analyzed. The NSS Medicare patients fell into 98 diagnostic related groups (DRGs). All 3,939 Medicare patients admitted in 1985 with the same DRGs as the NSS patients were also identified and their financial data analyzed. The NSS patients lost $999,643 because of the 266 medicare reimbursed NSS patients sustained high losses which overwhelmed the modest profits of the 269 non-Medicare patients. When data from all Medicare patients (which includes both NSS and non-NSS patients) with the same DRGs are analyzed, large profits are realized. These profits are totally due to pass-through payments received. Without pass throughs the loss for all 3,939 Medicare patients in these 98 DRGs would have been $1,641,273. The impact of eliminating pass throughs in the next few years needs to be determined. NSS patients represent a group that generates high financial losses under the federal prospective reimbursement system. However, present Medicare reimbursement of other less seriously ill patients with similar DRGs more than compensate these losses if pass throughs are used in determining reimbursements.

Pharmacoeconomic impact of critically ill surgical patients

Financial information on 131 patients and drug-related information on 176 patients admitted to a surgical intensive care unit (ICU) were prospectively collected. The average stay was nearly five days and patients received 8.6 drugs per day for a total average exposure of 12.2 different drugs. Antibiotics and analgesics were used in over 90 percent of patients. The patients' diagnoses fit into 53 different diagnosis-related groups (DRG). Hospital costs were significantly greater than DRG payment for an average revenue loss of $17,803 per patient. Patients with a primary diagnosis of sepsis had the largest revenue loss, averaging $54,738. One hundred patients were revenue losers. Total hospital stay was statistically longer than DRG-projected length of stay. Pharmacy charges averaged 13.6 percent of total hospital charges. Patients receiving systemic antifungals, triple antibiotics, catecholamines, and total parenteral nutrition had high hospital and pharmacy costs. This study suggests that ICU patients are costly to hospitals and that drug use is expensive. We suggest that increased pharmacy involvement in the care of ICU patients may help curtail escalating drug costs in these patients.

Physicians and DRGs. Hospital management alternatives

Rising health care costs in general and hospital costs in particular have placed significant financial strain on federal programs such as Medicare. It was with this in mind that the Reagan administration in 1983 initiated Medicare's new prospective payment system based on diagnostic-related groups (DRGs) to reduce the growth rate of Medicare expenditures. The introduction of DRGs has generated significant controversy in the health care community. The DRG system may necessitate consideration of four new management alternatives by hospital administrators: increased monitoring and regulation of physicians, profit-loss sharing arrangements between physicians and hospital management, development of collective protocols among physicians, and bedside budget balancing. This study examines the opinions of a random sample of 838 physicians from the West North-Central region regarding these management alternatives. The findings suggest that physicians have strong negative opinions about these management alternatives and believe that they will have a negative impact on the health care system. The development of collective protocols emerges as the most likely acceptable alternative among physicians, but even collective protocols as an alternative promise limited success.

Diagnosis-related groups: past and future

Introduction of the diagnosis-related group (DRG)-based Medicare Prospective Payment System is one of a series of major innovations that has occurred in the payment and delivery of health care over the past ten years. Changes such as the increased prevalence of health maintenance organizations, preferred provider organizations, third-party utilization review programs, and the peer review organizations for Medicare patients have all altered the way health care is financed and delivered. The DRG-based Medicare Prospective Payment System is the most visible of these changes, given its breadth of application and its radical departure from the previous retrospective reimbursement for hospital care. The Medicare Prospective Payment System has been in effect since October, 1983. As we approach the fifth anniversary of this program, it is a good time to review its history and to make some judgments as to its future.

Economic outcome under Medicare prospective payment at a tertiary-care institution: the effects of demographic, clinical, and logistic factors on duration of hospital stay and part A charges for medical back problems (DRG 243)

We investigated the effects of prospectively identified factors on the duration of hospital stay and part A charges in 240 hospitalizations (of 230 patients) for the diagnosis-related group "medical back problems" (DRG 243) at a tertiary-care institution in 1985 to determine whether heterogeneity existed within this reimbursement category. We confirmed our initial postulates that nonosteoporotic fractures and neck problems, as well as hospitalizations primarily for myelography after outpatient neurologic evaluation, had considerably different economic outcomes and thus excluded these categories from further analysis. Statistical analysis (forward stepwise regression) of the remaining 132 patients who had "general medical back problems" showed that increasing age, associated osteoporosis, and therapeutic injections best explained variation in the natural logarithm of duration of stay (R2 = 0.16). Total number of diagnoses, spondylosis, associated osteoporosis, age, therapeutic injections, and performance of special procedures best explained the variation in the logarithm of part A charges (R2 = 0.29). The ability to identify factors within a specified category that affect the duration of hospitalization and part A charges jeopardizes the fairness of prospective payment, and we believe that DRG 243 should be adjusted for age, comorbidity, and readily identifiable clinical syndromes that have disparate economic consequences. Because of poorly substantiated efficacy and a significant association with longer hospital stays and higher part A charges, clinicians should review the use of therapeutic injections for medical back problems. Analysis of case-mix such as ours should be helpful in promoting efficient practice and ensuring the fairness of any reimbursement system.

Emergency department care: cost awareness by health care providers

With the escalation of health care costs during the past decade, it has become increasingly important for the physician to be aware of the cost of various components of health care delivery. The following study was undertaken to ascertain the "cost awareness" of four different groups of health care providers. This was accomplished by having these groups estimate the cost of patient visits to an emergency department. Significant errors were observed in these cost estimations, and error trends were seen to occur that were independent of education and experience.

Changes in payment policies: impact on physicians' office testing

Recent changes in payment policies include powerful pecuniary incentives to move care from expensive hospital settings to cheaper outpatient sites. Physicians face competition from a growing number of alternative providers in the diagnostic testing marketplace. Given that a concurrent trend involves aggressive utilization review with stiff penalties for noncompliance, physicians are challenged to practice appropriate restraint in ordering and performing tests.