The Effect of Referral and Transfer Patients on Hospital Funding in a Capitated Health Care Delivery System

Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand

Prospective payment systems reimburse hospitals based on diagnosis-specific flat fees, which are generally based on average costs. While this encourages cost-consciousness on the part of hospitals, it introduces undesirable incentives for patient transfers. Hospitals might feel encouraged to transfer patients if the expected treatment costs exceed the diagnosis-related flat fee. A transfer fee would discourage such behavior and, therefore, could be welfare enhancing. In 2003, New Zealand introduced a fee to cover situations of patient transfers between hospitals. We investigate the effects of this fee by analyzing 4,020,796 healthcare events from 2000 to 2007 and find a significant reduction in overall transfers after the policy change. Looking at transfer types, we observe a relative reduction in transfers to non-specialist hospitals but a relative increase in transfers to specialist facilities. It suggests that the policy change created a focusing effect that encourages public health care providers to transfer patients only when necessary to specialized providers and retain those patients they can treat. We also find no evidence that the transfer fee harmed the quality of care, measured by mortality, readmission and length of stay. The broader policy recommendation of this research is the introduction or reassessment of transfer payments to improve funding efficiency.

Do Capitation-based Reimbursement Systems Underfund Tertiary Healthcare Providers? Evidence from New Zealand

One of the main concerns about capitation-based reimbursement systems is that tertiary institutions may be underfunded due to insufficient reimbursements of more complicated cases. We test this hypothesis with a data set from New Zealand that, in 2003, introduced a capitation system where public healthcare provider funding is primarily based on the characteristics of the regional population. Investigating the funding for all cases from 2003 to 2011, we find evidence that tertiary providers are at a disadvantage compared with secondary providers. The reasons are that tertiary providers not only attract the most complicated, but also the highest number of cases. Our findings suggest that accurate risk adjustment is crucial to the success of a capitation-based reimbursement system. Copyright © 2017 John Wiley & Sons, Ltd.

Insurance status influences emergent designation in surgical transfers

BACKGROUND

There is a perception among surgeons that hospitals disproportionately transfer unfavorably insured patients for emergency surgical care. Emergency medical condition (EMC) designation mandates referral center acceptance of patients for whom transfer is requested. We sought to understand whether unfavorably insured patients are more likely to be designated as EMCs.

MATERIALS AND METHODS

A retrospective cohort study was performed on patient transfers from a large network of acute care facilities to emergency surgery services at a tertiary referral center from 2009-2013. Insurance was categorized as favorable (commercial or Medicare) or unfavorable (Medicaid or uninsured). The primary outcome, transfer designation as EMC or non-EMC, was evaluated using multivariable logistic regression. A secondary analysis evaluated uninsured patients only.

RESULTS

There were 1295 patient transfers in the study period. Twenty percent had unfavorable insurance. Favorably insured patients were older with fewer nonwhite, more comorbidities, greater illness severity, and more likely transferred for care continuity. More unfavorably insured patients were designated as EMCs (90% versus 84%, P < 0.01). In adjusted models, there was no association between unfavorable insurance and EMC transfer (odds ratio [OR], 1.61; 95% confidence interval [CI], 0.98-2.69). Uninsured patients were more likely to be designated as EMCs (OR, 2.27; CI, 1.08-4.77).

CONCLUSIONS

The finding that uninsured patients were more likely to be designated as EMCs suggests nonclinical variation that may be mitigated by clearer definitions and increased interfacility coordination to identify patients requiring transfer for EMCs.

Healthcare reimbursement models and orthopaedic trauma: will there be change in patient management? A survey of orthopaedic surgeons

OBJECTIVES

Healthcare reimbursement models are changing. Fee-for-service may be replaced by pay-for-performance or capitated care. The purpose of this study was to examine the potential changes in orthopaedic trauma surgery patient management based on potential shifts in policy surrounding readmission and reimbursement.

METHODS

An e-mail survey consisting of 3 case-based scenarios was delivered to 375 orthopaedic surgeons. Five options for management of each case were provided. Each of the 3 cases was presented in 3 different healthcare settings: scenario A, our current healthcare setting; scenario B, in which 90-day reoperation or readmission would not be reimbursed; and scenario C, in which a capitated healthcare structure paid a fixed amount per patient.

RESULTS

The response rate was 40.3% with 151 surgeons completing the survey. A 71.1% of the respondents were in private practice settings, whereas 28.3% were in academic centers. In each case, there was significant increase in the respondents' choice to transfer patients to tertiary care centers under both the capitated and penalization systems as compared with the current fee-for-service model.

CONCLUSIONS

This survey is the first of its kind to demonstrate through case-based scenarios that a healthcare system with readmission penalties and capitated reimbursement models may lead to a significant increase in transfer of complex orthopaedic trauma patients to tertiary care centers. Physicians should be encouraged to continue evidence-based medicine instead of making decisions due to finances, and other avenues of healthcare savings should be explored to decrease patient transfer rates with healthcare changes.

Factors associated with the disposition of severely injured patients initially seen at non–trauma center emergency departments: disparities by insurance status

IMPORTANCE

Trauma is the leading cause of potential years of life lost before age 65 years in the United States. Timely care in a designated trauma center has been shown to reduce mortality by 25%. However, many severely injured patients are not transferred to trauma centers after initially being seen at non–trauma center emergency departments (EDs).

OBJECTIVES

To determine patient-level and hospital-level factors associated with the decision to admit rather than transfer severely injured patients who are initially seen at non–trauma center EDs and to ascertain whether insured patients are more likely to be admitted than transferred compared with uninsured patients.

DESIGN, SETTING, AND PARTICIPANTS

Retrospective analysis of the 2009 Nationwide Emergency Department Sample. We included all ED encounters for major trauma (Injury Severity Score, >15) seen at non–trauma centers in patients aged 18 to 64 years. We excluded ED discharges and ED deaths. We quantified the absolute risk difference between admission vs transfer by insurance status, while adjusting for age, sex, mechanism of injury, Injury Severity Score, weekend admission and month of visit, and urban vs rural status and median household income of the home zip code, as well as annual ED visit volume and teaching status and US region.

MAIN OUTCOMES AND MEASURES

Inpatient admission vs transfer to another acute care facility.

RESULTS

In 2009, a total of 4513 observations from 636 non–trauma center EDs were available for analysis, representing a nationally weighted population of 19,312 non–trauma center ED encounters for major trauma. Overall, 54.5% in 2009 were admitted to the non–trauma center. Compared with patients without insurance, the adjusted absolute risk of admission vs transfer was 14.3% (95% CI, 9.2%-19.4%) higher for patients with Medicaid and 11.2% (95% CI, 6.9%-15.4%) higher for patients with private insurance. Other factors associated with admission vs transfer included severe abdominal injuries (risk difference, 15.9%; 95% CI, 9.4%-22.3%), urban teaching hospital vs non–teaching hospital (risk difference, 26.2%; 95% CI, 15.2%-37.2%), and annual ED visit volume (risk difference, 3.4%; 95% CI, 1.6%-5.3% higher for every additional 10,000 annual ED visits).

CONCLUSIONS AND RELEVANCE

Patients with severe injuries initially evaluated at non–trauma center EDs were less likely to be transferred if insured and were at risk of receiving suboptimal trauma care. Efforts in monitoring and optimizing trauma interhospital transfers and outcomes at the population level are warranted.

Cost savings attributable to reductions in intensive care unit length of stay for mechanically ventilated patients

OBJECTIVES

To estimate the actual cost savings that could be achieved through reductions in intensive care unit (ICU) length of stay and duration of mechanical ventilation by determining the short-run marginal variable cost of an ICU and ventilator day.

RESEARCH DESIGN

Retrospective cohort study in a university-affiliated teaching hospital.

SUBJECTS

All patients receiving mechanical ventilation in the ICU for more than 48 hours (n = 1778) from July 1, 2005 to June 30, 2006.

MEASURES

The hospital's administrative and cost databases were used to determine total costs, variable costs, and direct-variable costs for each patient on each individual ICU and hospital day.

RESULTS

Direct-variable costs comprised 19.3% of total ICU costs and 18.4% of total hospital costs. Marginal direct-variable costs (the cost of each additional ICU day) were small compared with the average daily total cost ($649 to $839 vs. $1751, in US dollars). In survivors with ICU lengths of stay more than 3 days, the mean direct-variable cost of the last ICU day was $397, while the mean direct-variable cost of the first ward day was $279, for a mean cost difference of $118 (95% CI, $21-$190). Reducing ICU and hospital length of stay by 1 day in all survivors with ICU lengths of stay more than 3 days would result in an immediate cost savings of only 0.2% of all hospital expenditures for these patients.

CONCLUSIONS

Marginal variable ICU costs are relatively small compared with average total costs and are only slightly greater than the cost of a ward day.