Principles involved in costing

The main principles involved in costing medical interventions are introduced with reference to a study on the economic costs imposed on Australia by stroke. These principles include the need to establish the viewpoint to be taken in the analysis, the use of marginal rather than average costs and the role of discounting. The concepts of financial versus economic costs, capital versus recurrent costs, overhead costs and transfer payments are explained. This paper should be read in conjunction with the earlier paper on cost-effectiveness analysis.

Characteristics of cost outliers who did not benefit from stroke rehabilitation

The purpose of this paper is twofold: 1) to identify stroke patients who generated substantial charges during inpatient rehabilitation, but did not seem to benefit from that experience and 2) to identify factors that can predict which patients will fall into this group using only variables known at admission to rehabilitation. High cost stroke patients during inpatient medical rehabilitation are examined to determine how they differ from low cost patients and to identify a subset who did not appear to benefit from rehabilitation. This paper is based on longitudinal charge data involving 73 former stroke rehabilitation patients discharged from three Boston area rehabilitation facilities in 1984. Medical charges are presented on initial acute and rehabilitation inpatient stays and on care received in the 12 months after discharge. Among these 73 stroke patients, charges for inpatient medical rehabilitation amounted to nearly 1.8 million dollars, excluding physician fees and out-of-pocket expenses. Of this total, 57.6% was accured by only 33% of the patients. Fourteen patients, who were both rehabilitation cost outliers and apparent rehabilitation "failures," were identified. Rehabilitation charges for these 14 amounted to $673,232 or 37.5% of the total rehabilitation charges for all 73 patients.

Medical management and managing medical care: the dilemma of evaluating new technology

A unique computer simulation model has been developed to investigate the broad clinical and economic effects of changing risk factors for cerebrovascular and cardiovascular disease. The model can be used in countries where good input data are available to provide valuable information to aid policy decisions on medical care. This article describes the computer model, the sources of population and cost data, and the assumptions that must be made when a model of this type is used. The Swedish and U.S. populations are compared, and the results are expressed in years of life saved. Cost-effectiveness of intervention is assessed by combining economic and clinical data, and the most favorable cost-effectiveness ratios are found in the elderly population with high levels of serum cholesterol and diastolic blood pressure. In contrast, the costs per year of life saved in the younger population at low risk are comparatively high.

The economics of hypertension and stroke

The prevention of stroke through the control of hypertension is cost-effective economically and medically. A reduced incidence of stroke generates savings to the health service in hospital and surgical costs, and the avoidance of premature mortality means survivors contribute more to the economy as a result of extra working years. In addition to financial benefits, antihypertensive agents can also improve a patient's quality of life. This can be measured with a variety of health profiles or indexes and is often expressed together with life expectancy in quality-adjusted life years. This article examines the benefits produced by the effective control of hypertension, taking data from England and Wales during the past 30 years.

Direct costs of stroke for a Swedish population

Direct costs were estimated for the treatment, rehabilitation, and nursing of 125 patients with first stroke in the Lund and Orup health districts (population of 200,191). Patients were followed from the onset of stroke in 1983 until October 31, 1985. The data were used to calculate the present value of the expected lifetime direct costs for an individual contracting his or her first stroke at various ages. For example, at the age of 72, these costs were estimated at SEK 283,000 for a man and SEK 561,000 for a woman. Hospital care was the major cost component (75% for males and 89% for females) at this age of onset. The results could be used to estimate the economic benefits of preventing new strokes, hence, forming part of a cost-effectiveness or cost-utility analysis. Together with prognoses of the expected developments in the incidence of stroke, they could also serve as the basis of forecasts of future costs of the health care and social service sectors.

Sociodemographic indicators of stroke mortality

Declining mortality from cerebrovascular disease (stroke) has become a hallmark of cause-specific mortality trends nationwide. Analysis of demographic and socioeconomic characteristics of the population in Allegheny County, western Pennsylvania, in 1980 was carried out to explore their utility as indicators of stroke mortality. Percent black population (followed by unemployment) was found to be the best predictor of stroke mortality in different county areas (r = 0.6, P = 0.001) compared with other variables including income or education. Possible implications for community intervention or primary care programs are discussed.

Is the pharmacological treatment of mild to moderate hypertension cost effective in stroke prevention?

Pooled data from clinical trials show that the incidence of fatal and nonfatal strokes combined is reduced by approximately 39% (95% CI: -48% to -28%) with antihypertensive treatment. However, given the relatively low incidence of stroke, it can be calculated that about 530 to 1375 mild to moderate hypertensive patients would need to be treated per year to prevent one stroke. Applying these results to the health service costs, both public and private, of treating mild to moderate hypertension in New Zealand we have estimated that the cost of preventing one stroke in those aged 35-64 years at between $110,900 and $285,400 in 1982 dollars. The offsetting hospital and community care costs to the health services of treating a stroke, was approximately $6500 giving a net cost of between $104,000 and $279,000 per stroke prevented. The cost of preventing a death from stroke was estimated to be between $356,000 and $1,822,000. Per year of life saved, this appears to be well in excess of such costly interventions as coronary artery bypass, heart transplantation and renal dialysis. Greater use should be made of inexpensive diuretics and nonpharmacological methods for the management of hypertension. A population strategy, rather than the present expensive high risk approach, could be far more cost effective in stroke prevention.

Long-term utilization and charges among post-rehabilitation stroke patients

This paper presents longitudinal charge data on 89 former stroke rehabilitation patients discharged from three Boston area rehabilitation facilities. Medical charges are presented on initial acute and rehabilitation inpatient stays and on care received in the 12 months after discharge. In the sample of 89 stroke patients, charges exceeded four million dollars excluding physician fees and out-of-pocket expenses. Of this total, 23% was for acute hospital care preceding rehabilitation (mean = 18 days), 52% for inpatient rehabilitation (mean = 55 days), 13% for rehospitalizations in the 12 months after discharge from rehabilitation (mean = 22 days) and 12% for a variety of outpatient services.

Nursing care costs for stroke patients in a rehabilitation setting

Many nursing departments have developed methods for identifying the cost of acute nursing care services. Assuming that rehabilitation services will soon be reimbursed on a prospective basis as well, the nursing costs of those services will also need to be ascertained. In a study of one rehabilitation service, it was found that nursing care costs accounted for a greater proportion of hospital charges in rehabilitation than is true in acute care and that length of stay was the best predictor of the cost of care.

The physician and resource allocation

Even though there is substantial pressure on physicians to significantly reduce the amount of public monies spent on geriatric health care, it is improper for physicians to let financial concerns take precedence over their obligations to care for the patients who seek their services and assistance. The doctor/patient relationship demands that the physician be faithful to the cause of meeting the needs of patients. This faith is kept by taking all necessary steps to respect and promote the autonomy of patients. This is best done by adhering to a commitment of pursuing a process of communication with patients that leads to the attainment of informed consent or refusal from patients. Two consequences likely to follow are protection of many patients from protracted, miserable deaths because of less use of invasive medical procedures, and subsequent financial savings from this lower degree of use.

Rehabilitation for stroke: a review

Survivors of stroke are often left with severe mental and physical disabilities, which create a major social and economic burden. Many investigators have attempted to assess the role of rehabilitation in reducing such disability. Few controlled studies provide accurate assessment and documentation of benefit. Because of the presence of multiple variables and inadequate measures of outcome, it is difficult to design studies evaluating the effectiveness of rehabilitation for stroke. It is unclear how early rehabilitation should begin and what aspects of rehabilitation are important. Intensive rehabilitation is an expensive and limited resource; thus, the ability to identify the subgroup of patients with stroke who are likely to benefit is a critical issue. Although preliminary guidelines for the selection of patients who are appropriate for rehabilitation are given, no uniform criteria reliably differentiate patients who need rehabilitation from those who will recover spontaneously or do poorly. Controlled studies in the practice of rehabilitation for stroke will provide much useful information for patient management.

Present and future patterns of stroke care

Stroke care represents a major use of community hospital resources. Age-related patterns in the care of elderly patients who have had strokes may be supported by recent changes in Medicare reimbursement strategies. The effects of these patterns on the overall quality of stroke care needs to be monitored.

Stroke hospitalization under prospective payments: analysis of diagnosis related group 14

Development of a hospital prospective payment system (PPS) for Medicare patients based on diagnosis related groups (DRGs) should generate renewed interest in acute care utilization by stroke patients. Within the PPS, these patients are classified as DRG 14--specific cerebrovascular disorders except transient ischemic attacks. Hospitals are paid a relatively fixed rate for each Medicare patient within this category. In order to investigate patterns of inpatient care for this DRG, hospital utilization patterns in four United States metropolitan areas with a variety of acute and long-term care utilization characteristics were compared. The study involved a total of 4,593 discharges in DRG 14. Hospital discharge and admission rates and mean stays of the four sample populations were evaluated. Data demonstrated that discharge and admission rates of the four areas in this DRG were similar. However, the results also indicated that mean stays for DRG 14 varied by over 100%. These differences could not be explained by differences in age level and payor status of sample populations. Some variations appeared to be related to limitations in the availability of nursing home beds for posthospital care stroke patients. These results suggest that efforts to improve the efficiency of hospital care for stroke patients under DRGs must increasingly focus on long-term care services.

Using case-mix information for budget development

This case study illustrates the use of case-mix information in budgetary decision making. Specifically, case-mix reports are used to evaluate a budget increase request and the effect of changing treatment patterns on the use of hospital services.