Interventions varied from introduction of reflex tests (Lyme index for cerebral spinal fluid canceled if the patients serum is negative for antibodies to Borrelia) and formal discontinuation of antiquated tests (bleeding time) to simple name changes in the electronic medical record (hepatitis C virus [HCV] viral load) (Table 1). WebSmoothed rate = Risk-adjusted rate * weight reference population rate * (1 weight) The counts that are used to calculate the rates of each indicator are determined as follows: Not unexpectedly, the data show that actual patient payment as measured by net patient revenue increased 22.5percent during the period, while total expenses derived from Worksheet A/Column 7in the Medicare Cost Report increased 26.7percent. Adjusted Discharges = Inpatient Discharges + [(Gross Outpatient Revenue/Gross Inpatient Revenue) X Inpatient Discharges] The case mix adjusted discharge metric is determined by multiplying the result of this formula by the inpatient case mix index. The concern is that, if hospitals experience larger increases in costs in the future without payment relief, their financial viability could be compromised. Formula: Adjusted Patient Days = [Inpatient Days * (Outpatient revenue Inpatient Revenue)]. WebEquivalent Patient Days represents actual admissions/patient days adjusted to include outpatient services. These procedures account for a small portion of all inpatient procedures and do not really reflect the fast-growing hospital outpatient sector. Actual hospital payments increased 27percent from 2011to 2016, which exceeded the rate of increase in total national health expenditures (24percent). 8 How is the admission rate of a hospital calculated? xMk@~X 5 bn<3L08U0dA Check out our specialized e-newsletters for healthcare finance pros. When evaluating whether to insource a test, we considered the entire cost of testing (reagents, labor) compared with the cost of testing at the reference laboratory together with any need for a faster turnaround time and physician support for result interpretation. a The study is unusual in placing most of the blame on high pricesnot on higher utilization. According to section 1886(d) (5) (F) of the Act, there Methods We conducted a retrospective chart review To analyze actual hospital payment, we introduce this simple formula: Hospital Payment = Population X (Volume of Hospital Encounters Population) X Prices Paid for Hospital Encounters. The Department of Pathology has 17.5 pathologists with only two full-time equivalents (FTEs) covering the clinical laboratory and transfusion services. Given the burden of rising health care costs relative to reimbursement, hospitals are increasingly searching for areas of savings. Hospital expenditures, including those of VA hospitals and other military hospitals, increased 27.1percent to $1.082trillion dollars in 2016from $851.9billion in 2011. Many hospitals have a discharge planner. 145 0 obj <>/Filter/FlateDecode/ID[<3B561D741E861B43B4A9419C5C157358><78943C9845DAE14EA8054630A512E573>]/Index[137 16]/Info 136 0 R/Length 58/Prev 218403/Root 138 0 R/Size 153/Type/XRef/W[1 2 1]>>stream Using an inpatient measure of volumeeither adjusted patient days or adjusted dischargeswill be biased downward as case complexity increases. Search for other works by this author on: Corresponding author: Charlene Bierl, MD, PhD; Factors associated with increases in US health care spending, 1996-2013, Utilization management in a large urban academic medical center: a 10-year experience, Utilization management in the changing health-care environment, Utilization management in the clinical laboratory: an introduction and overview, Utilization Management in the Clinical Laboratory and Other Ancillary Services, Antiquated tests within the clinical pathology laboratory, Impact of weekly feedback on test ordering patterns, The practice of clinical pathology: a quantitative description of laboratory director activities at a large academic medical center, Decreased clinical laboratory turnaround time after implementation of a collection manager system, Size and structure of the U.S. clinical laboratory testing market, U.S. Clinical Laboratory Industry Forecast and Tends 2018-2020, Application of case mix index in the allocation of nursing human resources, Impact of neuroradiology staffing on academic hospital level quality and cost measures for the neuroscience service line [published online Juky 26, 2018], Its our turn: implications for pathology from the institute of medicines report on diagnostic error, An analysis of clinical consultation activities in clinical chemistry: implications for transformation and resident training in chemical pathology, Improving appropriateness of blood utilization through prospective review of requests for blood products: the role of pathology residents as consultants, A novel approach to improving utilization of laboratory testing, Send & hold clinical decision support rules improvement to reduce unnecessary testing of vitamins A, E, K, B1, B2, B3, B6 and C, Establishing benchmarks and metrics for utilization management, American Society for Clinical Pathology, 2018. hbbd``b` @H J@%"v$@ b @b,&F t\ c endstream endobj startxref Hospital Value-Based Purchasing (VBP) Adjustment Values for the alternative volume metrics show significant differences in growth between 2011and 2016. Author William O Cleverley. Check out our specialized e-newsletters for healthcare finance pros. We have been confronted with many of these challenges at our institution and have therefore chosen to execute smaller interventions to control laboratory costs and improve laboratory utilization efficiency, such as establishment of a hospital laboratory utilization management committee, removal of antiquated tests from the test menu, and consolidation of send-out testing to a single reference laboratory. Discharges and Case Mix Index (CMI) for 2010 to 2016. Adjusted patient days is a general measure of combined inpatient and outpatient volume. This pooling affords a "borrowing of statistical strength" that provides more confidence in the results. Possible interventions were discussed among the physician medical staff in a multidisciplinary fashion, initially as ad hoc discussions until a formal Laboratory Utilization Committee was formed in 2015. The conclusion based on the use of the Equivalent Discharges hospital volume metric that most of the increase in hospital expenditures can be attributed to increased volume, and not so much to increases in prices paid for hospital services, is in sharp contrast to the conclusions based on the use of the adjusted patient days and adjusted discharges hospital volume metrics, which pin the majority of the increase in hospital payment to increases in prices paid. (patient days x 100) (maintained How is adjusted discharge calculated for a hospital? A review of the literature reveals numerous efforts used by health care systems to curb laboratory costs. WebAdjusted Admission An aggregate measure of workload reflecting the sum of admissions and equivalent admissions attributed to outpatient services. hUo0W>tc"Ut6:G@;GM"}:|?>D&)L&D,bR gH s~mdi]>5S~r&{qQmh79U/MoP&kqUo`j/|'lLb\dy6#6v`p.g8/B<72ptGjYU}?KSEg,BP:]CU,dpd(\g]p"rE-peptEb]utmzJ6>t .VUwtPuR2t4#R*LZLLHu^NOD:#J1RBX;,`SY2>1C`B**QD ]J! 125 OT hours/4,370 productive hours = 2.9% OT for this pay period. This multidisciplinary committee is tasked with reviewing the existing laboratory ordering patterns as well as any request for a new in-house test (hospital main laboratory or point of care), a new reference laboratory, or a significant expansion of indicated usage for an established test. Some examples include utilization management committees,3,5 modifications to test menus,3,6 clinical decision support,4 weekly feedback to ordering physicians,7 and engaging laboratory directors in the role of gatekeeper for access to expensive esoteric tests.4 Many of these interventions are time-consuming for laboratory directors and are unaccounted for by the relative value unit system used by many health systems to evaluate physician productivity.8 In addition, smaller community hospitals and growing academic health systems may not have the resources to institute large-scale efforts to improve laboratory utilization. Healthcare finance content, event info and membership offers delivered to your inbox. Testing performed at outside laboratories, Where possible, reference laboratory tests were consolidated under a single contract, Laboratorian review of orders for expensive genetic/molecular testing orders, Defer to outpatient setting, where possible; look at prior authorization; and optimize billing, Apt Downey was discontinued and sent to a reference laboratory, Reduce overhead cost of maintaining a low-volume assay (quality control, competency, proficiency), Remove antiquated tests from the test menu, Antiquated tests identified for discontinuation, Reduce reagent and reference laboratory expense, Introduce reflex testing where appropriate, 1) Lyme index on CSF canceled if the serum is not positive for, Reduce unnecessary testing and associated costs, 1) CKMB and CK removed from the Cardiac Panel in the EMR, Reduce reagent and reference laboratory expenses, Implementation of Sunquest Collection Manager System (Sunquest Information Systems) to facilitate bedside barcoding of specimens, Reduction in turnaround time, increased efficiency (reduction in labor usage), paper label savings, Education, feedback, and collaboration with ordering physicians, Forum to review all new testing and to evaluate current available testing for opportunities for improved efficiency/effectiveness, Ensure cost-effective use of laboratory resources, Initial presentation on best practices for laboratory test ordering followed by weekly deidentified feedback regarding laboratory test ordering provided to internal medicine house staff, Promote awareness of test ordering patterns and encourage more selective ordering, thus reducing expense through decreased initial and follow-up test ordering, Copyright 2023 American Society for Clinical Pathology. Rodriguez-Borja E, Corchon-Peyrallo A, Barba-Serrano E, et al. Check out our specialized e-newsletters for healthcare finance pros. Member benefits delivered to your inbox! The revenue generated per patient, per day, in the healthcare industry provides insight into the amount of money the hospital receives for every patient it admits for treatment. 3 0 obj For hospitals with fewer than 500 total discharges in the fiscal year, the total payment is increased by 25 percent. Because volume as measured by Equivalent Discharges increased more rapidly than was indicated using the other metrics, the Equivalent Discharges metric also points to considerably more modest increase in price or payment, at 3.0percent over the 5-year period. WebInpatients (unless the bodies are removed from the hospital by legal authorities such as the coroner or medical examiner). To account for baseline shifts in volume, we also examined the volume of tests relative to two functions of hospital volume and acuity: CMI-adjusted discharges and CMI-adjusted hospital days. This file contains hospitals case mix indexes (CMI) for discharges. H|T[o0~WGoqb*LjWL{) In addition, if the volume of patients and/or higher acuity simultaneously increases appropriate utilization, then the volume reduction due to utilization efforts could be eliminated, whereas had no intervention taken place, laboratory utilization would have been even higher. Depending on the size of the utilization efforts, the decrease in reagent expense could be exceeded by the increase (per test) in labor and maintenance costs. Variance Analysis of Hospital Cost Increases, 2011 to 2016. From the Medicare Cost Reports, the actual net patient revenue realized from all payers was captured for every PPS hospital in 2011and 2016. To illustrate this point, the exhibit below provides a perspective on the changing nature of hospital encounters during the 2011to 2016period. (Predicted 30-day readmission/Expected readmission) * U.S. national readmission rate = RSRR. Then, multiply the Adjusted discharges by the Case Mix Index (CMI) to derive Number of CMI Adjusted Discharges. This trial tested efficacy of the Uncertainty Communication Education Module, a simulation-based mastery learning curriculum designed to establish competency in communicating diagnostic uncertainty. The formula follows: (Predicted 30-day readmission/Expected readmission) * U.S. national readmission rate = RSRR In addition, proper interpretation of results in the context of patient disease has also become challenging.14 Some have suggested that formation of diagnostic management teams with pathologists serving to assist with test selection and results interpretation would help to avoid inappropriate testing and treatment.15,16 Indeed, at one institution, hematopathologists served a beneficial role in helping to select testing for bone marrow biopsies. The Equivalent Discharges volume metric suggests only 16percent was caused by actual increases in payment per unit while 84percent is related to increased population and intensity of service. Health care laboratory expenditures have been escalating over the past 10 years, with cost per visit being a significant driver.1 Hospital-based laboratories have faced a simultaneous drop in reimbursement for services, increasing denials of claims, and increasing pressure from hospital administration to decrease laboratory expenses through more efficient operation and appropriate test utilization.2 Laboratory directors are in a difficult position when confronted with demands for improved utilization, as they are not the ordering physicians and are instead tasked with improving utilization through education of the medical staff regarding the utility and limitations of laboratory tests.3,4. Expenditures ( 24percent ) rate of increase in total national health expenditures ( 24percent ) Education,! 3 0 obj for hospitals with fewer than 500 total discharges in the results `` of. ( outpatient revenue Inpatient revenue ) ] was captured for every PPS hospital in 2011and 2016: patient... 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