Factors Associated with Prolonged Observation Services Stays and the Impact of Long Stays on Patient Cost

BackgroundPatients are treated using observation services (OS) when their care needs exceed standard outpatient care (i.e., clinic or emergency department) but do not qualify for admission. Medicare and other private payers seek to limit this care setting to 48 hours.ConclusionPatient cost sharing for most OS stays of less than 24 hours is lower than the Medicare inpatient deductible. However, prolonged OS stays potentially increase this cost sharing.     

Investing in CenteringPregnancy™ Group Prenatal Care Reduces Newborn Hospitalization Costs

ObjectivesCenteringPregnancy™ group prenatal care is an innovative model with promising evidence of reducing preterm birth. The outpatient costs of offering CenteringPregnancy pose barriers to model adoption. Enhanced provider reimbursement for group prenatal care may improve birth outcomes and generate newborn hospitalization cost savings for insurers. To investigate potential cost savings for investment in CenteringPregnancy, we evaluated the impact on newborn hospital admission costs of a pilot incentive project, where BlueChoice Health Plan South Carolina Medicaid managed care organization paid an obstetric practice offering CenteringPregnancy $175 for each patient who participated in at least five group prenatal care sessions.MethodsUsing a one to many case-control matching without replacement, each CenteringPregnancy participant was matched retrospectively on propensity score, age, race, and clinical risk factors with five individual care participants. We estimated the odds of newborn hospital admission type (neonatal intensive care unit [NICU] or well-baby admission) for matched CenteringPregnancy and individual care cohorts with four or more visits using multivariate logistic regression. Cost savings were calculated using mean costs per admission type at the delivery hospital.ResultsOf the CenteringPregnancy newborns, 3.5% had a NICU admission compared with 12.0% of individual care newborns (p < .001). Investing in CenteringPregnancy for 85 patients ($14,875) led to an estimated net savings for the managed care organization of $67,293 in NICU costs.ConclusionsCenteringPregnancy may reduce costs through fewer NICU admissions. Enhanced reimbursement from payers to obstetric practices supporting CenteringPregnancy sustainability may improve birth outcomes and reduce associated NICU costs.     

贵州省职工医疗保险省级统筹的适配性待遇水平研究*

目的：提高职工医疗保险省级统筹的科学性和稳定性，为医保管理部门提供逻辑思路、实证资料和政策参考，解决省级统筹的待遇测算问题。方法：本研究以前期运用ILO保险成本模型计算得出的贵州省省级统筹筹资标准6.20%为基准， 基于2020年贵州省职工医疗保险运行报告中的数据，根据“以收定支、收支平衡”的测算原则，利用粗估测算法中的平衡系数法，分析统收统支省级统筹模式的职工医疗保险适配性待遇方案。结果：以2020年医疗费为基数计算出的6.20%的筹资水平进行统筹，政策选择下限为住院报销80.00%，门诊报销50.00%，上限为住院报销82.00%，门诊报销55.00%，可选方案为8个； 以各统筹地区单位缴费均值6.60%的筹资水平进行统筹，政策选择下限为住院报销80.00%，门诊报销55.00%，上限提高至住院报销85.00%，门诊报销58.00%；可选方案增加至12个。结论：粗估法中的平衡系数法适合运用在省级统筹待遇水平的测算和甄选工作上，且随着统筹费率的提高，政策选择余地增大，适配性待遇水平也会相应提高。该研究可为医保管理部门制定职工医保省级统筹待遇方案提供可靠的理论依据和政策参考。     

An RBRVS approach to financial analysis in health care organizations

Resource-based relative value scales (RBRVS) have altered the outpatient reimbursement system of America's health care system and established a method of standardization whereby the efficiency of medical practices of varying size and complexity can be compared using a standard (the cost conversion factor) for analysis. This article compares the utility of RBRVS with earlier systems of reimbursement and concludes with a brief speculative assertion regarding the emergence of the next stage of ambulatory care reimbursements through ambulatory payment classifications.     

Challenges of Health Technology Assessment in Pluralistic Healthcare Systems: An ISPOR Council Report

Health technology assessment (HTA) has been growing in use over the past 40 years, especially in its impact on decisions regarding the reimbursement, adoption, and use of new drugs, devices, and procedures. In countries or jurisdictions with “pluralistic” healthcare systems, there are multiple payers or sectors, each of which could potentially benefit from HTA. Nevertheless, a single HTA, conducted centrally, may not meet the needs of these different actors, who may have different budgets, current standards of care, populations to serve, or decision-making processes.This article reports on the research conducted by an ISPOR Health Technology Assessment Council Working Group established to examine the specific challenges of conducting and using HTA in countries with pluralistic healthcare systems. The Group used its own knowledge and expertise, supplemented by a narrative literature review and survey of US payers, to identify existing challenges and any initiatives taken to address them. We recommend that countries with pluralistic healthcare systems establish a national focus for HTA, develop a uniform set of HTA methods guidelines, ensure that HTAs are produced in a timely fashion, facilitate the use of HTA in the local setting, and develop a framework to encourage transparency in HTA. These efforts can be enhanced by the development of good practice guidance from ISPOR or similar groups and increased training to facilitate local use of HTA.     

Evidence-based decision making: when should we wait for more information?

We discuss the challenge of managing innovation in and access to health care interventions in an evidence-based, cost-effective way, and we describe a decision-making framework (using U.S. and U.K. case studies) for health care payers considering the adoption of new technologies. We argue that providing reimbursement for what could be a cost-effective technology "only in the context of research" will be appropriate if the costs of delaying implementation are offset by the value of "keeping one's options open" by waiting for more information. We conclude that there is a need for better integration of health care decision-making processes with research policies.     

Cost-Effectiveness of a Computerized Provider Order Entry System in Improving Medication Safety Ambulatory Care

BackgroundComputerized provider order entry (CPOE) is the process of entering physician orders directly into an electronic health record. Although CPOE has been shown to improve medication safety and reduce health care costs, these improvements have been demonstrated largely in the inpatient setting; the cost-effectiveness in the ambulatory setting remains uncertain.ObjectiveThe objective was to estimate the cost-effectiveness of CPOE in reducing medication errors and adverse drug events (ADEs) in the ambulatory setting.MethodsWe created a decision-analytic model to estimate the cost-effectiveness of CPOE in a midsized (400 providers) multidisciplinary medical group over a 5-year time horizon— 2010 to 2014—the time frame during which health systems are implementing CPOE to meet Meaningful Use criteria. We adopted the medical group’s perspective and utilized their costs, changes in efficiency, and actual number of medication errors and ADEs. One-way and probabilistic sensitivity analyses were conducted. Scenario analyses were explored.ResultsIn the base case, CPOE dominated paper prescribing, that is, CPOE cost $18 million less than paper prescribing, and was associated with 1.5 million and 14,500 fewer medication errors and ADEs, respectively, over 5 years. In the scenario that reflected a practice group of five providers, CPOE cost $265,000 less than paper prescribing, was associated with 3875 and 39 fewer medication errors and ADEs, respectively, over 5 years, and was dominant in 80% of the simulations.ConclusionsOur model suggests that the adoption of CPOE in the ambulatory setting provides excellent value for the investment, and is a cost-effective strategy to improve medication safety over a wide range of practice sizes.     

Inpatient costs of endophthalmitis evaluated for the whole of France

Background

Endophthalmitis is a severe condition that requires hospitalization with at least day care. Information on the incidence rate, costs and consequences of endophthalmitis is scarce.

Objective

To estimate the number of patients with endophthalmitis hospitalized in France, as well as the average costs and hospital budget consequences.

Methods

French Programme de Médicalisation des Systèmes d’Information (PMSI) data for 2006, derived from the official DRG classification, were analysed. Data were extracted concerning the following primary diagnoses: ‘purulent endophthalmitis’, ‘other endophthalmitis’ and ‘endophthalmitis associated with another disease’. Two durations of hospitalization were compared: the actual duration and a weighted DRG duration. The cost of hospitalization was weighted by the average DRG cost + daily hospital costs × the difference between the actual and weighted DRG days in hospital. All costs are presented in €, year 2007 values.

Results

A total of 1518 patients (mean age 68.7 years; 47.1% male) experienced 1725 hospitalizations for endophthalmitis, including 1416 cases (82.1%) admitted to public hospitals. The majority of patients (79.1%) were classified by DRG codes that did not specify endophthalmitis (DRG 02M03Z). Most patients (1342) were given a drug injection and 510 underwent vitrectomy. Four patients died in hospital and 75 were transferred to other hospitals. The actual duration of hospitalization for endophthalmitis in public hospitals was 8.1 days (mean), whereas the average weighted DRG duration was 5.1 days, which underestimated the actual duration by 3 days. The average hospital cost was €3688 per patient, totalling €6 361 119 per annum for all public and private hospitalizations in France, including €223 723 as day care. If hospital funding was wholly based on DRG tariffs, the budget for endophthalmitis would be severely underestimated. The DRG inclusion of ’severe acute ocular infections’ as a proxy for endophthalmitis dramatically underestimated its true cost by approximately 30%.

Conclusion

For health economic evaluations, it is inappropriate to use DRG classifications as proxies for endophthalmitis. Expressed more generally, hospitalization cost analyses should not be based on any specific DRG, but always on the clinically relevant primary diagnosis. The PMSI clustering algorithm underestimates the hospital budgets required for endophthalmitis. Lastly, the PMSI (exhaustively reporting all hospitalizations) is best suited to capturing yearly endophthalmitis incidence rates, average costs and national health expenditure.     

Building a Targeted Automatic e-Consult (TACo) Program

Driving ForcesTraditional specialty consults are resource intensive and may be delayed or omitted if the treating physician does not recognize the need for specialty advice. Targeted automatic e-consults (TACos) address these limitations by prospectively identifying patients using the electronic health record (EHR) and presenting pertinent information on a dashboard, enabling consultants to provide a virtual consult with written recommendations. The TACo model may improve value by facilitating more expert input without a proportional increase in cost.Building a TACoThrough our experience developing a TACo program, we have identified four key steps. First, identify appropriate conditions that have support from the health system and from frontline clinicians. Second, design the digital infrastructure, including lists and dashboards. Third, create a funding plan to support the consultant's time, either through internal grants, external grants, e-consult billing codes, or some combination of the three. Fourth, pilot on a select number of services, iterate, and scale.ChallengesFunding for TACos has been a major barrier to adoption. Fortunately, new e-consult billing codes may make it possible to recoup as least part of the program's cost. Technological hurdles also exist, particularly in building real-time lists within the EHR to prospectively identify patients based on complex criteria.Next StepsWe look for this model to gain popularity as evidence of clinical and operational benefit mounts. We anticipate reimbursement policies may be updated to support this type of consult. Finally, we expect machine learning to play a role in identifying patients and providing recommendations in the future.     

Mastering the APG grouping process

This case history details one company's success in using coding software to handle the requirements of the new ambulatory patient group (APG) system following the implementation of this complex new payment mechanism for outpatient care. Providers and payers are looking to coding software for help in billing and paying for outpatient services. Since the APG system "consolidates," "packages," and "discounts" a facility's payment for outpatient services, the new coding software helps ensure adequate reimbursement.     

Patient transitions from inpatient to outpatient: Where are the risks? Can we address them?

Transitions of care from the inpatient to outpatient setting can be dangerous. Studies have shown that almost half of all hospitalized patients experience a medical error after discharge. With efforts to decrease the cost of healthcare, patients are discharged “quicker and sicker” oftentimes leaving families to manage the patient's recovery with little support. Most medical errors can be traced back to communication breakdowns and lack of systems to follow up on needed care. Inpatient and outpatient providers must work together to develop processes to address these deficits or face decreasing reimbursement and malpractice claims.     

Linking cost control measures to health care services by using activity-based information.

Canada's health care institutions are under pressure to limit expenditures, maintain or increase productivity, and assimilate new technology. Even though more than 75% of hospital operating expenditures are controllable, according to a study by the Economic Council of Canada, cost systems are needed to provided essential management information. The new Canadian Management Information System (MIS) Guidelines for health care are designed to provide accurate cost measurement of patient treatment and to help managers evaluate the impact of planned program changes on areas of operational responsibility. Other potential benefits of implementing the MIS guidelines include correcting dysfunctional funding of health care units with benchmarking and setting high reporting standards for resource use at the patient level (MIS, 1991). This paper focuses on one important aspect of bringing these costs under control by examining the relation between cost deviations (variances) and underlying cost drivers. Our discussion will lead to the conclusion that incompatibility of DRG methodology and traditional cost accounting models may be an important source of cost variability within diagnostically-related disease groupings.     

The determinants of medical technology adoption in different decisional systems: A systematic literature review

Studies of determinants of adoption of new medical technology have failed to coalesce into coherent knowledge. A flaw obscuring strong patterns may be a common habit of treating a wide range of health care innovations as a generic technology. We postulate three decisional systems that apply to different medical technologies with distinctive expertise, interest, and authority: medical-individualistic, fiscal-managerial, and strategic-institutional decisional systems. This review aims to examine the determinants of the adoption of medical technologies based on the corresponding decision-making system. We included quantitative and qualitative studies that analyzed factors facilitating or inhibiting the adoption of medical technologies. In total, 65 studies published between 1974 and 2014 met our inclusion criteria. These studies contained 688 occurrences of variables that were used to examine the adoption decisions, and we subsequently condensed these variables to 62 determinants in four main categories: organizational, individual, environmental, and innovation-related. The determinants and their empirical association with adoption were grouped and analyzed by the three decision-making systems. Although we did not identify substantial differences across the decision-making systems in terms of the direction of the determinants’ influence on adoption, a clear pattern emerged in terms of the categories of determinants that were targeted in different decision-making systems.     

The emerging role of cell phone technology in ambulatory care

Three factors are coinciding to reshape the ambulatory care market: chronic disease prevalence, workforce shortages, and the availability of cell phone technology with very high consumer penetration. These factors will disproportionately drive the business strategies and practices of ambulatory care providers, payers, and delivery systems this decade. Market dynamics are driving the healthcare industry to adopt new strategies to deal with the swelling prevalence of chronic disease. Healthcare organizations are constrained by money and inadequate tools to systematically manage chronic care patients. As a result, traditional notions of ambulatory care are changing from being provider-centered to becoming more patient-centric. A host of new remote monitoring and communication technologies are available so that providers can now interact with patients "anywhere, anytime." The traditional care setting is shifting to where the patient is rather than where the physician is located. Patients are the most underutilized resource in healthcare, and patient engagement is the key to managing chronic illness. Cell phones are particularly suited for leveraging the time and expertise of providers while engaging patients in their own self-care. To demonstrate this concept, data are presented that illustrate how cell phone applications significantly reduced the cost of treating severely asthmatic children and teens in 2 ways: through more frequent communication between patients and their medical teams, and by motivating patients to become more engaged and knowledgeable about their care. The healthcare industry can support consumer choice by making available as many options as possible for engaging patients in their care. Consumers like having choices and patients are no different: they are not all one type. This suggests an emerging role for cell phone applications and platforms that enable both Internet and medical device connectivity where appropriate for managing chronic conditions. As a management tool, cell phones have the potential to become a standard of care in the field. If so, cell phones may materially offset the cost of chronicity by helping patients avoid preventable events of care in licensed health facilities, something much more economically powerful than attempting to reduce the costs of producing care in those settings.     

The effect of misclassification errors on case mix measurement

Case mix systems have been implemented for hospital reimbursement and performance measurement across Europe and North America. Case mix categorizes patients into discrete groups based on clinical information obtained from patient charts in an attempt to identify clinical or cost difference amongst these groups. The diagnosis related group (DRG) case mix system is the most common methodology, with variants adopted in many countries. External validation studies of coding quality have confirmed that widespread variability exists between originally recorded diagnoses and re-abstracted clinical information. DRG assignment errors in hospitals that share patient level cost data for the purpose of establishing cost weights affects cost weight accuracy. The purpose of this study is to estimate bias in cost weights due to measurement error of reported clinical information. DRG assignment error rates are simulated based on recent clinical re-abstraction study results. Our simulation study estimates that 47% of cost weights representing the least severe cases are over weight by 10%, while 32% of cost weights representing the most severe cases are under weight by 10%. Applying the simulated weights to a cross-section of hospitals, we find that teaching hospitals tend to be under weight. Since inaccurate cost weights challenges the ability of case mix systems to accurately reflect patient mix and may lead to potential distortions in hospital funding, bias in hospital case mix measurement highlights the role clinical data quality plays in hospital funding in countries that use DRG-type case mix systems. Quality of clinical information should be carefully considered from hospitals that contribute financial data for establishing cost weights.     

Managed Entry Agreements: Policy Analysis From the European Perspective

BackgroundMounting pressures on the healthcare system, such as budget constraints and new, costly health technologies reaching the market, have pushed payers and manufacturers to engage in managed entry agreements (MEAs) to address uncertainty and facilitate market access.ObjectivesThis study was conducted to illustrate the current landscape of MEAs in Europe and to analyze the main hurdles they face in implementation, providing a policy perspective.MethodsWe conducted a health policy analysis based on a literature review and described the emergence, classification, current use, and implementation obstacles of MEAs in Europe.ResultsThroughout Europe, uncertainty and high prices of health technologies have pushed stakeholders towards MEAs. Two main types of MEAs were applied heavily, finance-based agreements (FBAs) and performance-based agreements, including individual performance-based agreements and coverage with evidence development (CED). Service-based agreements have not been as heavily considered so far, yet are increasingly used. Many European countries are turning to CEDs to address uncertainty and facilitate market access while negotiating the pricing and reimbursement rates of products. Despite the interest in CEDs, European countries have moved toward FBAs due to the complexities and burdens associated with PBAs.ConclusionsUltimately, in Europe, with the exception of Italy, where MEAs have proven to be inefficient, MEAs are predominantly FBAs dedicated to addressing cost containment from payers’ perspective and external reference pricing from the manufacturers’ perspective. It has been speculated that MEAs will disappear in the medium-term as they are counterproductive for extending patient access and emergence of innovation. To inform value-based decision making and allow early access to innovative medicines, CEDs should be revisited.     

Diffusion of new technologies: rational and irrational

The diffusion of medical technology, the process by which new clinical procedures and devices come into use in the health care system, is an historical topic, as old as medicine itself. Hospitals, physicians, manufacturers, third-party payers, and patients all are factors in the demand for, and adoption and diffusion of, new medical technologies. The federal government also plays a role both in furthering technology diffusion through federally financed health programs and in attempting to control diffusion by stimulating state certificate of need and other regulatory programs. The history of the CT scanner's diffusion illustrates the problems that can result from the lack of a coherent strategy to control the diffusion of major medical technologies. Some of these same problems are now appearing in the diffusion of magnetic resonance imaging (MRI) devices. In the current health care environment, prospective payment and the continuing period of remarkable technological innovation are major influences on technology diffusion and on initiatives for technology assessment. The diffusion of technology can be made more rational by instituting a formal process to identify technologies (both old and new) that require assessment, by financial support for assessment efforts, by selective reimbursement for clinical trials, and by regionalization of costly procedures.     

Stratified cost-effectiveness analysis: a framework for establishing efficient limited use criteria

The cost-effectiveness of new health care technologies is conditional upon who receives what therapy and under what circumstances. Understanding this heterogeneity in cost-effectiveness, health care payers often limit reimbursement of therapies to a more restrictive sub-group of patients than that indicated in a product's licensing. Such limits may be based upon clinical or demographic criteria that are prognostic of costs, outcomes or both. However, there is little guidance on how to estimate and interpret stratified cost-effectiveness analysis. In this paper we present a framework for estimating the benefits from stratification that permits consideration of both the opportunity cost resulting from a lack of adherence with criteria and the efficiency loss associated with incorporating equity concerns.     

The influence of economic incentives and regulatory factors on the adoption of treatment technologies: a case study of technologies used to treat heart attacks

The Technological Change in Health Care Research Network collected unique patient-level data on three procedures for treatment of heart attack patients (catheterization, coronary artery bypass grafts and percutaneous transluminal coronary angioplasty) for 17 countries over a 15-year period to examine the impact of economic and institutional factors on technology adoption. Specific institutional factors are shown to be important to the uptake of these technologies. Health-care systems characterized as public contract systems and reimbursement systems have higher adoption rates than public-integrated health-care systems. Central control of funding of investments is negatively associated with adoption rates and the impact is of the same magnitude as the overall health-care system classification. GDP per capita also has a strong role in initial adoption. The impact of income and institutional characteristics on the utilization rates of the three procedures diminishes over time.