Distribution of variable vs fixed costs of hospital care

CONTEXT: Most strategies proposed to control the rising cost of health care are aimed at reducing medical resource consumption rates. These approaches may be limited in effectiveness because of the relatively low variable cost of medical care. Variable costs (for medication and supplies) are saved if a facility does not provide a service while fixed costs (for salaried labor, buildings, and equipment) are not saved over the short term when a health care facility reduces service. OBJECTIVE: To determine the relative variable and fixed costs of inpatient and outpatient care for a large urban public teaching hospital. DESIGN: Cost analysis. SETTING: A large urban public teaching hospital. MAIN OUTCOME MEASURES: All expenditures for the institution during 1993 and for each service were categorized as either variable or fixed. Fixed costs included capital expenditures, employee salaries and benefits, building maintenance, and utilities. Variable costs included health care worker supplies, patient care supplies, diagnostic and therapeutic supplies, and medications. RESULTS: In 1993, the hospital had nearly 114000 emergency department visits, 40000 hospital admissions, 240000 inpatient days, and more than 500000 outpatient clinic visits. The total budget for 1993 was $429.2 million, of which $360.3 million (84%) was fixed and $68.8 million (16%) was variable. Overall, 31.5% of total costs were for support expenses such as utilities, employee benefits, and housekeeping salaries, and 52.4% included direct costs of salary for service center personnel who provide services to individual patients. CONCLUSIONS: The majority of cost in providing hospital service is related to buildings, equipment, salaried labor, and overhead, which are fixed over the short term. The high fixed costs emphasize the importance of adjusting fixed costs to patient consumption to maintain efficiency.     

Savings from outpatient antibiotic therapy for osteomyelitis. Economic analysis of a therapeutic strategy

Clinical, economic, and epidemiologic data were used to compare the costs of conventional inpatient care of osteomyelitis with the costs of early-discharge treatment using a once-daily parenteral antibiotic at home. Estimated expenses included inpatient medical care, outpatient visits, supplies, child care, home care, transportation, and lost productivity. Early-discharge treatment was associated with lower medical direct, non-medical direct, and indirect expenses than conventional inpatient treatment. Estimated savings per patient ranged from $510 to $22,232 (demonstrating the wide differences in estimated savings when different sources of data on hospital costs are used). These savings are due to large decreases in inpatient costs, which are partially offset by increased outpatient costs. However, because outpatient costs are more often borne by patients than are inpatient costs, early-discharge treatment could be more expensive from the patient's perspective, despite its savings for the hospital and for society as a whole.     

Prioritizing Oregon's hospital resources. An example based on variations in discretionary medical utilization.

OBJECTIVE--To provide an alternative to Oregon's treatment-specific approach to rationing, we propose a prioritization based on the local hospital resources invested in discretionary medical admissions. DESIGN--We used 1988 Oregon hospital discharge data to determine age- and sex-adjusted per-capita rates of inpatient days for discretionary medical admissions (for high-variation medical conditions) in each of 33 hospital service areas. Potential ceiling rates were defined based on prevailing utilization rates for discretionary medical admissions in each hospital service area. Savings were calculated under the assumption that resources allocated for inpatient treatment of these conditions in areas that exceed the ceiling rates were reduced accordingly. SETTING--Nonfederal, acute-care hospitals used by Oregon residents. STUDY POPULATION--Oregon residents. MAIN OUTCOME MEASURES--Savings were defined in terms of patient days, hospital beds, hospital charges, and average costs. RESULTS--Among the 16 largest hospital service areas, patient-day rates for discretionary medical admissions ranged from 188 to 335 patient days per thousand. Potential savings from applying different ceiling rates ranged from $0.4 million to $94.7 million per year. If the rate in the state capital (Salem) were used as the ceiling (218 days per thousand), then 238 beds could be closed in 20 hospital service areas, for an estimated cost savings of $47.3 million. CONCLUSIONS--Hospital resources invested in discretionary admissions in high-rate areas represent an important potential source of funds for reallocation to meet other defined health care needs. Setting limits based on units of health care supply (eg, beds, capital equipment, and physicians) should be considered as an option for resource reallocation within health care.     

Excess healthcare cost associated with a low smoking prevalence, Barbados

Policy makers need justification for smoking prevention. Barbados has debated but not enacted policies on tobacco control. This study estimated tobacco-associated morbidity and hospital care costs in order to justify prevention in a developing country with a low smoking prevalence of 9%. Hospital files of patients of index diseases and other chronic diseases with recorded status of smoking were followed on their outpatient, inpatient, elective and emergency attendance up to last discharge and analyzed as a nested case-control in a cohort of smokers and non-smokers. Outcome measure was excess healthcare financial burden per person per year derived from morbidity incidence density, risk ratios, preventive fractions and excess hospital services consumed per person per year. Of 258 hospital patients, 84 were smokers. The mean follow up was 5.2 years. Eighty-four smokers had 463 excess outpatient appointments, 43 excess admissions, and 2651.6 excess hospital days. There were 44.8 fewer elective admissions and 62.24 more emergency admissions among smokers who suffered frequent and severer complications, (odds ratio = 3.78 for > or = 3 complications, p for Chi square trend, 0.0223), and had poorer prognosis translating into higher care costs, personnel effort, time, and human suffering. The excess hospital care cost was BDS$2,267 per smoker per year. Despite a low prevalence of smoking, tobacco caused a substantial public health burden. Hospital care cost for patients who smoked was 1.86 times higher than for non-smokers, and five times more than the government per capita health allocation. The annual excess hospital care costs in 1556 similar smokers would have exceeded the annual tobacco revenue.     

Medical care costs of patients with AIDS in San Francisco

This article reports on the findings of a study of medical care expenditures of persons with acquired immunodeficiency syndrome (AIDS) treated at San Francisco General Hospital in 1984. We found that mean charges per AIDS hospital admission were $9024, mean charges of patients with AIDS who received all their hospital inpatient and outpatient care at San Francisco General Hospital in 1984 ranged from $7026 to $23,425, and mean lifetime inpatient charges of patients with AIDS who died and who had received all their inpatient care at the hospital were $27,571. These latter charges were considerably lower than previously published estimates of lifetime direct medical care costs of patients with AIDS, and the possible reasons for the differences include much lower lifetime use of hospital services and somewhat lower cost per hospital day.     

Evidence for self-selection among health maintenance organization enrollees

Inpatient utilization and health care costs of employees and their families were studied for 11 employee groups covered by Blue Cross and Blue Shield in the Minneapolis-St Paul area during the year before optional health maintenance organization (HMO) enrollment. Before enrolling in HMOs, those joining averaged 53% fewer inpatient days (470 days/1,000 v 994 days/1,000) than those retaining fee-for-service (FFS) coverage. Both hospital and professional expenditures were lower among HMO enrollees. Age-specific analysis showed higher inpatient use of continuing FFS subscribers in every category. Self-selection may be an important determinant of differences in use and costs when comparing HMOs with FFS coverage.     

Comprehensive follow-up care and life-threatening illnesses among high-risk infants: A randomized controlled trial

CONTEXT: Inner-city high-risk infants often receive limited and fragmented care, a problem that may increase serious illness. OBJECTIVE: To assess whether access to comprehensive care in a follow-up clinic is cost-effective in reducing life-threatening illnesses among high-risk, inner-city infants. DESIGN: Randomized controlled trial. SETTING AND PARTICIPANTS: A total of 887 very-low-birth-weight infants born in a Texas county hospital between January 1988 and March 1996 and followed up in a children's hospital clinic. One hundred four infants who became ineligible or died after randomization but before nursery discharge were excluded from the analysis. INTERVENTIONS: Infants were randomly assigned to receive routine follow-up care (well-baby care and care for chronic illnesses; n = 441) or comprehensive care (which included the components of routine care plus care for acute illnesses, with 24-hour access to a primary caregiver; n = 446). MAIN OUTCOME MEASURES: Life-threatening illnesses (ie, causing death or hospital admission for pediatric intensive care) occurring between nursery discharge and age 1 year, assessed by blinded evaluators from inpatient charts and state Medicaid and vital statistics records; and hospital costs (estimated from department-specific cost-to-charge ratios). RESULTS: Comprehensive care resulted in a mean of 3.1 more clinic visits and 6.7 more telephone conversations with clinic staff (P<.001 for both). One-year outcomes were unknown for fewer comprehensive-care infants than routine-care infants (9 vs 28; P =.001). Identified deaths were similar (11 in comprehensive care vs 13 in routine care; P =.68). The comprehensive-care group had 48% fewer life-threatening illnesses (33 vs 63; P<.001), 57% fewer intensive care admissions (23 vs 53; P =.003), and 42% fewer intensive care days (254 vs 440; P =.003). Comprehensive care did not increase the mean estimated cost per infant for all care ($6265 with comprehensive care and $9913 with routine care). CONCLUSION: Comprehensive follow-up care by experienced caregivers can be highly effective in reducing life-threatening illness without increasing costs among high-risk inner-city infants. JAMA. 2000;284:2070-2076.     

家庭医生激励对2型糖尿病患者医疗费用的影响

背景　海门区于2018年1月实施家庭医生按绩效支付（P4P）的糖尿病管理模式,激励家庭医生提高服务质量。目的　评价P4P模式对2型糖尿病患者血糖控制、服药依从性、医疗服务利用及医疗费用的影响。方法　2019年3-6月,对南通市通州区和海门区的2型糖尿病患者（从村卫生室管理的确诊为2型糖尿病患者名单中每隔10例抽取1例患者）进行问卷调查,以实施P4P管理模式的海门区为激励组（n=496）,以常规管理的通州区为对照组（n=589）,问卷主要包括人口学特征、医疗服务利用、医疗费用、空腹血糖、服药依从性。采用负二项回归、Logistic回归和最小二乘法（OLS）回归分析门诊就诊次数、住院服务利用和医疗费用的影响因素。结果　两组2型糖尿病患者教育程度、家庭年均收入、同时患慢性病种数比较,差异有统计学意义（P<0.05）。激励组的空腹血糖、过去1年门诊就诊次数、住院服务利用、医疗总费用低于常规组,激励组服药依从性高于常规组,差异有统计学意义（P<0.05）。多因素回归分析结果显示,校正了人口学特征和空腹血糖后,与常规组相比,激励组患者的门诊就诊次数降低了34.6%（IRR=0.654,P<0.05）,药品费用增加了54.96%（eb-1=0.549 6,P<0.05）,医疗总费用降低了34.43%（eb-1=-0.344 3,P<0.05）。进一步将患者按年龄分为<60、60~70、>70岁组后进行多因素回归分析,结果显示与常规组相比,激励组<60、>70岁糖尿病患者的门诊就诊次数分别降低了63.2%（IRR=0.368,P<0.05）和54.2%（IRR=0.458,P<0.05）,>70岁的糖尿病患者住院服务利用率降低了48.0%（OR=0.520,P<0.05）。结论　P4P模式在一定程度上降低了糖尿病患者的门诊服务的利用和>70岁老年人的住院服务利用,降低了年总医疗费。     

家庭医生激励对2型糖尿病患者医疗费用的影响

背景　海门区于2018年1月实施家庭医生按绩效支付（P4P）的糖尿病管理模式,激励家庭医生提高服务质量。目的　评价P4P模式对2型糖尿病患者血糖控制、服药依从性、医疗服务利用及医疗费用的影响。方法　2019年3-6月,对南通市通州区和海门区的2型糖尿病患者（从村卫生室管理的确诊为2型糖尿病患者名单中每隔10例抽取1例患者）进行问卷调查,以实施P4P管理模式的海门区为激励组（n=496）,以常规管理的通州区为对照组（n=589）,问卷主要包括人口学特征、医疗服务利用、医疗费用、空腹血糖、服药依从性。采用负二项回归、Logistic回归和最小二乘法（OLS）回归分析门诊就诊次数、住院服务利用和医疗费用的影响因素。结果　两组2型糖尿病患者教育程度、家庭年均收入、同时患慢性病种数比较,差异有统计学意义（P<0.05）。激励组的空腹血糖、过去1年门诊就诊次数、住院服务利用、医疗总费用低于常规组,激励组服药依从性高于常规组,差异有统计学意义（P<0.05）。多因素回归分析结果显示,校正了人口学特征和空腹血糖后,与常规组相比,激励组患者的门诊就诊次数降低了34.6%（IRR=0.654,P<0.05）,药品费用增加了54.96%（eb-1=0.549 6,P<0.05）,医疗总费用降低了34.43%（eb-1=-0.344 3,P<0.05）。进一步将患者按年龄分为<60、60~70、>70岁组后进行多因素回归分析,结果显示与常规组相比,激励组<60、>70岁糖尿病患者的门诊就诊次数分别降低了63.2%（IRR=0.368,P<0.05）和54.2%（IRR=0.458,P<0.05）,>70岁的糖尿病患者住院服务利用率降低了48.0%（OR=0.520,P<0.05）。结论　P4P模式在一定程度上降低了糖尿病患者的门诊服务的利用和>70岁老年人的住院服务利用,降低了年总医疗费。     

The 1987 US hospital AIDS survey

In 1987, the National Public Health and Hospital Institute conducted a national survey of 623 acute-care hospitals to obtain information relating to inpatient and outpatient care for persons with acquired immunodeficiency syndrome (AIDS). Two hundred seventy-six hospitals reported treating persons with AIDS; the average length of stay was 16.8 days. Average costs and revenues per inpatient day were $681 and $545, respectively, with a cost per patient per year of $17,910. Estimated cost for AIDS inpatient care during 1987 was $486 million; Medicaid represented the primary payer. Regional and ownership comparisons for this year and between 1985 and 1987 indicated significant differences in utilization, payer source, and financing. Results suggest major differences in reimbursement and losses related to payer source or lack of insurance, with many hospitals that serve large numbers of low-income persons with AIDS encountering moderate to severe financial shortfalls. We conclude that increasing concentrations of persons with AIDS in relatively few hospitals in large cities may make it more difficult to secure the broader political base necessary to obtain adequate support for treatment.     

The provision and financing of medical care for AIDS patients in US public and private teaching hospitals

The National Association of Public Hospitals and the Association of American Medical Colleges' Council of Teaching Hospitals conducted a detailed survey on hospital care to patients with acquired immunodeficiency syndrome (AIDS) in major US public and private teaching institutions in 1985. The 169 hospitals treating patients with AIDS that responded to the survey reported providing inpatient services to 5393 patients with AIDS. These patients accounted for 171,205 inpatient days and 8806 inpatient admissions, with an average length of stay of 19 days. The average costs and revenue for patients with AIDS per day were $635 and $482, respectively, with Medicaid representing the most frequent third-party payer. The average inpatient cost per patient per year was $20,320. Using Centers for Disease Control estimates of 18,720 patients diagnosed as having AIDS and alive during any part of 1985, we estimate that the total cost of inpatient care for patients with AIDS was $380 million for that year. We also found significant regional and ownership differences in source of payment for patients with AIDS and regional differences in revenues received for AIDS treatment. Results indicate that the costs of treating patients with AIDS will profoundly affect major public and private teaching institutions, but that public teaching hospitals in states with restrictive Medicaid programs will be most adversely affected.     

Prospective study of the effect of safety belts on morbidity and health care costs in motor-vehicle accidents

To assess the impact of safety belt use on the extent of injuries sustained in motor-vehicle accidents and the incurred health care costs, 1364 patients were prospectively evaluated at four Chicago-area hospitals. Of these, 791 (58%) were wearing a safety belt whereas 573 (42%) were not. The mean injury severity score for safety belt wearers was 1.8 +/- 0.07 vs 4.51 +/- 0.31 in those not wearing a safety belt. Only 6.8% of safety belt wearers required admission vs 19.2% of those not wearing a safety belt. Restrained occupants incurred mean charges of $534 +/- $67 compared with $1583 +/- $201 in unrestrained occupants. Thus, safety belt wearers had a 60.1% reduction in severity of injury, a 64.6% decrease in hospital admissions, and a 66.3% decline in hospital charges. Our findings demonstrate the significant societal burden of nonuse of safety belts in terms of morbidity and the costs of medical care.     

The 500-bed hospital that isn't there: the Victorian Department of Health review of the Hospital in the Home program

The Victorian Department of Health reviewed its Hospital in the Home (HIH) program in 2009, for the first time in a decade. Annual reimbursements to all Victorian hospitals for HIH care had reached $110 million. Nearly all Victorian hospitals have an HIH program. Collectively, these units recorded 32,462 inpatient admissions in 2008-09, representing 2.5% of all inpatient admissions, 5.3% of multiday admissions and 5% of all bed-days in Victoria. If HIH were a single entity, it would be a 500-bed hospital. Treatment of many patients with acute community- and hospital-acquired infections or venous thromboembolism has moved into HIH. There is still capacity for growth in clinical conditions that can be appropriately managed at home. The review found evidence of gaming by hospitals through deliberate blurring of boundaries between acute HIH care and postacute care. The Victorian HIH program is a remarkable success that has significantly expanded the overall capacity of the hospital system, with lower capital resources. It suggests HIH with access to equivalent hospital remuneration is necessary for a successful HIH policy. Hospitals should invest in HIH medical leadership and supervision to expand their HIH services, including teaching. HIH is a challenge to the traditional vision of a hospital. Greater community awareness of HIH could assist in its continued growth.     

The epidemiology of disease expenses. The costs of caring for children with cancer

We determined medical costs and family out-of-pocket expenses over time for 569 children with malignant neoplasms. All medical charges (inpatient and outpatient), family out-of-pocket expenses, and wages lost were collected and annualized. The mean cost of cancer care and treatment per patient-year was $29,708, with variation by diagnosis, prognosis, and year since diagnosis. The mean annual hospital inpatient cost was $15,455; mean ambulatory care cost, $3,806; and family out-of-pocket disease-related expenses, $9,787. Family out-of-pocket expenses added about 50% to the total cost of disease-related care and consumed 38% of gross annual family income; wages lost accounted for nearly half. About 95% of all medical costs was paid by private, public, or charitable payers. Out-of-pocket medical expenses for which the family was responsible were about $1,000 each year. However, all nonmedical, disease-related expenses were borne by the family.     

The costs of hospital-based medical care for patients with the acquired immunodeficiency syndrome

The costs which were incurred by patients for hospital-based care during the time from the diagnosis of the acquired immunodeficiency syndrome (AIDS) to death, range from pounds 6838 in London, England, to US$147,000 in Atlanta, USA. In 1986, a study was undertaken in Sydney to calculate the costs of the hospital-based treatment of patients with AIDS. The medical records of 39 patients who had received all their treatment at one institution were analysed retrospectively, and data were collected on their survival, hospitalizations, investigations and treatments. The mean survival time of the 39 patients was 7.2 months; during this time they had a mean of 4.0 hospital admissions that accounted for an average total stay of 34.6 days. In addition, they made, on average, 9.4 outpatient visits. There was a significant difference in the duration of hospitalization between those who presented with an opportunistic infection and those who presented with a malignancy (38.3 days and 22.4 days, respectively; P = 0.01). The mean cost for hospital-based care was $A22,332 (range, $A4229-$A58,398), of which 95% of costs were incurred for inpatient care. The mean cost of care of those who presented with an opportunistic infection was significantly higher than that of those who presented with a malignancy, but there was no difference according to the age at the time of diagnosis. If the predictions of 3000 cases of AIDS in Australia by 1991 are realized, such cases will represent--conservatively--an additional cost to the community of $A58.5 million. This study emphasizes the need for health authorities to plan for the future financial impact of the hospital-based treatment of patients with AIDS.     

The economic impact and multiplier effect of a family practice clinic on an academic medical center

Academic medical centers are facing the need to expand their primary care referral base in an increasingly competitive medical environment. This study describes the medical care provided during a 1-year period to 6304 patients registered with a family practice clinic located in an academic medical center. The relative distribution of primary care, secondary referrals, inpatient admissions, and their associated costs are presented. The multiplier effect of the primary care clinic on the academic medical center was substantial. For every $1 billed for ambulatory primary care, there was $6.40 billed elsewhere in the system. Each full-time equivalent family physician generated a calculated sum of $784,752 in direct, billed charges for the hospital and $241,276 in professional fees for the other specialty consultants. The cost of supporting a primary care clinic is likely to be more than offset by the revenues generated from the use of hospital and referral services by patients who received care in the primary care setting.     

High-cost users of hospital beds in Western Australia: a population-based record linkage study

OBJECTIVE: To describe how high-cost users of inpatient care in Western Australia differ from other users in age, health problems and resource use. DESIGN AND DATA SOURCES: Secondary analysis of hospital data and linked mortality data from the WA Data Linkage System for 2002, with cost data from the National Hospital Cost Data Collection (2001-02 financial year). OUTCOME MEASURES: Comparison of high-cost users and other users of inpatient care in terms of age, health profile (major diagnostic category) and resource use (annualised costs, separations and bed days). RESULTS: Older high-cost users (> or = 65 years) were not more expensive to treat than younger high-cost users (at the patient level), but were costlier as a group overall because of their disproportionate representation (n = 8466; 55.9%). Chronic stable and unstable conditions were a key feature of high-cost users, and included end stage renal disease, angina, depression and secondary malignant neoplasms. High-cost users accounted for 38% of both inpatient costs and inpatient days, and 26% of inpatient separations. CONCLUSION: Ageing of the population is associated with an increase in the proportion of high-cost users of inpatient care. High costs appear to be needs-driven. Constraining high-cost inpatient use requires more focus on preventing the onset and progression of chronic disease, and reducing surgical complications and injuries in vulnerable groups.     

Health USA. A national health program for the United States.

The Health USA Act of 1991 addresses two fundamental health services financing problems: the more than 30 million uninsured persons and the rising costs for health care and for health insurance. Health USA would provide coverage of the entire resident population for comprehensive medical and preventive health and long-term care services through a universal tax-funded financing system. The federal government would contribute an average of 87% of program costs to each state, which would establish, under federal guidelines, a state health program. Each individual or family may enroll in any health plan approved by the state program, including many private plans, or a plan run by the state program. Through the approved plan of their choice, enrollees would receive covered services and obtain their care from participating physicians and other professional practitioners, hospitals, and other facilities. The state program would pay approved plans a capitation payment for every person enrolled. The plans would pay professional providers fees, as part of an all-payer system of fee schedules and expenditure targets, or capitation payments or salary. Hospitals would be financed through global budgets negotiated by the state program with each hospital. The plan run by the state program would pay the health care costs of any person who does not enroll in an approved plan, making the state plan the payer of last resort and eliminating uncompensated care and cost shifting by providers. Health USA would separate health care coverage from employment, ensuring uninterrupted coverage and eliminating employers' administrative role in providing coverage. Federal and state taxes would replace present methods of financing by private insurance premiums and large out-of-pocket expenditures. Building on the present system of health plans, Health USA would offer all persons a wide choice of competing plans in which to enroll and offer professional providers a wide choice of plans in which to practice. It would control costs by increasing financial accountability of providers and health plans, reducing present reliance on intrusive utilization review and on patient cost sharing. By controlling health care and administrative costs, Health USA would cover the entire population and, according to independent cost estimates, reduce national health expenditures by $11.5 billion in 1991.     

End-stage renal disease in the Northern Territory: current and future treatment costs

OBJECTIVE: To compare hospital costs of Aboriginal and non-Aboriginal patients having haemodialysis treatment and forecast the future treatment cost. METHODS: The costs of patients with HD in the "Top End" of Australia's Northern Territory were estimated for the financial years 1996/97 and 1997/98 using a hospital costing model. We used an Autoregression Integrated Moving Average model to predict future demand. RESULTS: 165 patients (101 Aboriginal and 64 non-Aboriginal) were treated at a total cost of $12.4 million in this two-year period. These 165 patients represented 0.7% of inpatients, 8.8% of total inpatient costs and 31.6% of total inpatient episodes of care in the Top End region. $9.5 million (77%) was spent on routine haemodialysis treatment and $2.9m (23%) on other hospitalisations. The average cost per routine haemodialysis treatment over the two-year period was $527, or $78 600 per patient treatment year. Hospitalisations for comorbidities occurred in 86% of Aboriginal and 39% of non-Aboriginal patients. Average cost per patient, number of admissions and length of hospital stays were all significantly greater for Aboriginals. We predict an average increase in the number of treatments of 12% each year over the next five years and a five-year cost of $49.8m. CONCLUSIONS: A multipronged strategy designed to reduce the prevalence and costs of renal failure is required.