A comparative study of the costliness of Manitoba hospitals

Acute care restructuring in Newfoundland and Labrador: the history and impact on expenditure

Objectives

To document the history of regionalization and its effects on the Newfoundland and Labrador acute care health system, and to describe changes in acute care expenditure in the St John's region where hospital redesign, closure and aggregation occurred in relation to other regions not exposed to aggregation.

Methods

Interviews were conducted with senior health officials. Transcripts and other reports were reviewed. Financial data were abstracted from audited general ledger statements received from the Ministry of Health.

Results

Regionalization achieved its objectives of hospital aggregation in St John's. The average number of full-time equivalent employees increased slightly by 2% (5304–5416). In some regions, integration of services was delayed because of conflict and resistance to change. There was some disparity between the Provincial Government's objectives for cost control and the CEOs’ perceptions of economies of scale. Between 1995/96 and 2002/03, total expenditures for the St John's region and the other five regional hospitals increased by 46% and 54%, respectively; total personal income of the population and government revenues increased by only 18% and 16%, respectively.

Conclusions

Regionalization in Newfoundland and Labrador facilitated aggregation of hospitals, but did not control the number of front-line workers and, consequently, total acute care expenditure. Expenditure increased significantly between1995 and 2002, at a rate which exceeded the increase in government revenues. The government's ability to pay for acute care will not be achieved unless employee costs are controlled or provincial income increases.

Variability in costs across hospital wards. A study of Chinese hospitals

Introduction

Analysts estimating the costs or cost-effectiveness of health interventions requiring hospitalization often cut corners because they lack data and the costs of undertaking full step-down costing studies are high. They sometimes use the costs taken from a single hospital, sometimes use simple rules of thumb for allocating total hospital costs between general inpatient care and the outpatient department, and sometimes use the average cost of an inpatient bed-day instead of a ward-specific cost.

Purpose

In this paper we explore for the first time the extent and the causes of variation in ward-specific costs across hospitals, using data from China. We then use the resulting model to show how ward-specific costs for hospitals outside the data set could be estimated using information on the determinants identified in the paper.

Methodology

Ward-specific costs estimated using step-down costing methods from 41 hospitals in 12 provinces of China were used. We used seemingly unrelated regressions to identify the determinants of variability in the ratio of the costs of specific wards to that of the outpatient department, and explain how this can be used to generate ward-specific unit costs.

Findings

Ward-specific unit costs varied considerably across hospitals, ranging from 1 to 24 times the unit cost in the outpatient department — average unit costs are not a good proxy for costs at specialty wards in general. The most important sources of variability were the number of staff and the level of capacity utilization.

Practice Implications

More careful hospital costing studies are clearly needed. In the meantime, we have shown that in China it is possible to estimate ward-specific unit costs taking into account key determinants of variability in costs across wards. This might well be a better alternative than using simple rules of thumb or using estimates from a single study.

Factors influencing hospital high length of stay outliers

Background

The study of length of stay (LOS) outliers is important for the management and financing of hospitals. Our aim was to study variables associated with high LOS outliers and their evolution over time.

Methods

We used hospital administrative data from inpatient episodes in public acute care hospitals in the Portuguese National Health Service (NHS), with discharges between years 2000 and 2009, together with some hospital characteristics. The dependent variable, LOS outliers, was calculated for each diagnosis related group (DRG) using a trim point defined for each year by the geometric mean plus two standard deviations. Hospitals were classified on the basis of administrative, economic and teaching characteristics. We also studied the influence of comorbidities and readmissions. Logistic regression models, including a multivariable logistic regression, were used in the analysis. All the logistic regressions were fitted using generalized estimating equations (GEE).

Results

In near nine million inpatient episodes analysed we found a proportion of 3.9% high LOS outliers, accounting for 19.2% of total inpatient days. The number of hospital patient discharges increased between years 2000 and 2005 and slightly decreased after that. The proportion of outliers ranged between the lowest value of 3.6% (in years 2001 and 2002) and the highest value of 4.3% in 2009. Teaching hospitals with over 1,000 beds have significantly more outliers than other hospitals, even after adjustment to readmissions and several patient characteristics.

Conclusions

In the last years both average LOS and high LOS outliers are increasing in Portuguese NHS hospitals. As high LOS outliers represent an important proportion in the total inpatient days, this should be seen as an important alert for the management of hospitals and for national health policies. As expected, age, type of admission, and hospital type were significantly associated with high LOS outliers. The proportion of high outliers does not seem to be related to their financial coverage; they should be studied in order to highlight areas for further investigation. The increasing complexity of both hospitals and patients may be the single most important determinant of high LOS outliers and must therefore be taken into account by health managers when considering hospital costs.

The association between psychiatrist numbers and hospitalization costs for schizophrenia patients: a population-based study

OBJECTIVE

This study explores the association between psychiatrist case volumes and costs for hospitalized schizophrenia patients.

METHODS

The study uses the Taiwan National Health Insurance Research Database for 2003, identifying the study subjects from the database by ICD-9-CM principal diagnosis code 295. Our study sample comprises of 135,621 admissions treated by 787 psychiatrists in 181 hospitals, with the sample being divided equally into three psychiatrist volume groups: <or=300 (low volume), 301-600 (medium volume) and >or=601 admissions (high volume). After adjusting for psychiatrist, patient and hospital characteristics, multiple regression analyses were performed to determine the association between psychiatrist case volume and hospitalization costs (total, drug, and non-drug).

RESULTS

The regression analyses showed that after adjusting for psychiatrist, patient and hospital characteristics, average treatment costs associated with hospitalized schizophrenia patients were inversely related to psychiatrist volume. The respective total costs, drug costs and non-drug costs of patients treated by high-volume psychiatrists were 369 US dollars (p<0.001), 26 US dollars (p<0.001) and 343 US dollars (p<0.001) lower than those of low-volume psychiatrists. The respective total costs, drug costs and non-drug costs for those treated by medium-volume psychiatrists were 248 US dollars (p<0.001), 22 US dollars (p<0.001) and 226 US dollars (p<0.001) lower than those of low-volume psychiatrists.

CONCLUSIONS

We find that after adjusting for patient, psychiatrist and hospital characteristics, an inverse volume-cost relationship exists for psychiatrists treating schizophrenia patients. Further studies should aim to investigate the volume-quality relationship to ensure that incremental cost savings associated with increased patient volume are not achieved at the expense of quality of patient care.

Policy analysis in an information-rich environment

Population-based insurance systems using longitudinal administrative data and record linkage techniques have helped create "information-rich" environments in several sites around the world. The output of five research groups using administrative data (Oxford, Western Australia, and three Canadian centres: Manitoba, Ontario and British Columbia) was analysed from contacts with the research groups and through use of the National Library of Medicine's PubMed and Medical Subject Headings (MeSH) categories. MeSH words "utilization", "economics", "physicians", and "physician practice patterns" more frequently characterized the research by the three Canadian centres than that of the other sites. With core funding for deliverables negotiated with the provincial health ministries, Canadian researchers have been more likely to use linked databases for policy analyses. Manitoba examples highlight the capabilities associated with these information-rich environments. They include the ability to analyse interventions longitudinally; to compare regions, areas and hospitals in defined populations; to combine information on patients and physicians; to add up expenditures for different services within the Canadian health-care system; and to examine population health issues in areas such as education and family services. Well-organized data and the capability for rapid response have been critical for timely policy analysis in Manitoba. A number of successes are mentioned; less successful efforts to influence practice patterns and to modify the internal workings of hospitals are noted. Investments in filling gaps in data collection and in enriching existing data would facilitate additional research. Planning and managing health care for an entire population has benefited greatly from the development of an information-rich environment.

Working more productively: tools for administrative data

OBJECTIVE

This paper describes a web-based resource (http://www.umanitoba.ca/centres/mchp/concept/) that contains a series of tools for working with administrative data. This work in knowledge management represents an effort to document, find, and transfer concepts and techniques, both within the local research group and to a more broadly defined user community. Concepts and associated computer programs are made as "modular" as possible to facilitate easy transfer from one project to another.

STUDY SETTING/DATA SOURCES

Tools to work with a registry, longitudinal administrative data, and special files (survey and clinical) from the Province of Manitoba, Canada in the 1990-2003 period.

DATA COLLECTION

Literature review and analyses of web site utilization were used to generate the findings.

PRINCIPAL FINDINGS

The Internet-based Concept Dictionary and SAS macros developed in Manitoba are being used in a growing number of research centers. Nearly 32,000 hits from more than 10,200 hosts in a recent month demonstrate broad interest in the Concept Dictionary.

CONCLUSIONS

The tools, taken together, make up a knowledge repository and research production system that aid local work and have great potential internationally. Modular software provides considerable efficiency. The merging of documentation and researcher-to-researcher dissemination keeps costs manageable.

Who are the high hospital users? A Canadian case study

OBJECTIVES

Researchers have taken two different approaches to understanding high use of hospital services, one focusing on the large proportion of services used by a small minority and a second focusing on the poor health status and high hospital use of the poor. This work attempts to bridge these two widely researched approaches to understanding health care use.

METHODS

Administrative data from Winnipeg, Manitoba covering all hospitalizations in 1995 were combined with public use Census measures of socio-economic status (neighbourhood household income). High users were defined as the 1% of the population who spent the most days in hospital in 1995 (n = 6487 hospital users out of population of 648715 including non-users).

RESULTS

One per cent of the Winnipeg population consumed 69% of the hospital days in 1995. Thirty-one per cent of the highest users were among the 20% of residents of neighbourhoods with the lowest household incomes, and 10% of the highest users were among the 20% from neighbourhoods with the highest household incomes. However, on most other dimensions, including gender, age, average days in hospital, average admissions, percentage who died in hospital and diagnostic reasons for being hospitalized, the similarities between high users, regardless of their socio-economic group, were striking.

CONCLUSIONS

The lower the socio-economic status, the more likely an individual is to make high demands on hospitals. However, patterns of use as well as the diseases and accidents that produce high use among residents of low income neighbourhoods are not much different from those that produce high use among residents of high income neighbourhoods.

Assessing the extent to which hospitals are used for acute care purposes

OBJECTIVES

The degree to which Manitobans were appropriately hospitalized for medical conditions was assessed using a retrospective chart review of a sample of patients in 26 hospitals.

RESEARCH DESIGN

A standardized set of object-based, nondiagnostic criteria (Inter-Qual) was used by trained abstractors to assess the patient at admission and for each day of stay.

RESULTS

A high percentage of admissions and days of care were inappropriate. Overall, 49.5% of medical patients were acute at the time of admission, 1.6% required no health care services, and 48.9% could have received care through alternate methods or facilities. Only 33.4% of the subsequent days of stay were appropriate. For patients assessed as acute at the time of admission, by the 8th day of stay, only 47% were still acute and by day 30, only 27% were acute. Patients aged 75 years or older were just as likely to be acute at the time of admission as were younger patients; however, they accounted for 54% of the days in the study, and fewer than 30% of these days were acute. Our data suggest that despite their high use of hospitals, disadvantaged groups (the poor, aboriginal Manitobans), have the same levels of appropriateness as others.

CONCLUSIONS

We conclude that alternatives to hospital care must first be established and made known and available before a shift in health care resources can occur.

An assessment of the potential for repatriating care from urban to rural Manitoba

OBJECTIVES

Following the closure of Manitoba hospital beds, the Manitoba government adopted a strategy of shifting hospital care from more expensive urban hospitals to less expensive rural facilities. With this project, Manitoba Centre for Health Policy and Evaluation (MCHPE) studied the implications of the stated policy of "repatriation."

RESEARCH DESIGN

The project first involved examining population-based patterns of hospital utilization to define hospital service areas for 10 large rural hospitals. Three different hospital service area definitions were developed for use in sensitivity testing. Rates of overall use of hospital services, indicators of need for health care, and patterns of use of urban facilities are compared for these hospital service areas. Using a large rural hospital as a benchmark, patterns of adult surgical, adult medical, pediatric, and obstetric care were examined for the hospital service areas. Number and percent of cases provided by the index hospital and by urban hospitals were compared, to assess the feasibility and the potential impact of redirection of care to the benchmark level.

CONCLUSIONS

Although in theory a significant percentage of care delivered to rural residents by Winnipeg hospitals might be redirected to rural institutions, the project raised issues of feasibility. Moreover, it identified that most of the redirected cases could be accommodated within existing capacity.

The unintended and unexpected impact of downsizing: costly hospitals become more costly

OBJECTIVES

In this project we assessed the impact of 1992 budget cuts ($50 million, or approximately 7% of urban hospitals' budgets) on the relative costliness of Manitoba's hospitals. The cuts targeted the teaching hospitals, those institutions we had found to be particularly costly in a previous Manitoba Centre for Health Policy and Evaluation study.

RESULTS

Unexpectedly, we found that because budget cuts were smaller proportionately than the number of beds closed, the care at the teaching hospitals (as well as at several other hospitals) became relatively more, not less, costly. Also quite contrary to public perceptions, once other expenditures such as new hospital programs and expansions were accounted for, the actual change in urban hospital expenditures over the years compared was less than 1%.

CONCLUSIONS

The study highlighted the importance of monitoring program outcomes.

Establishing a population data-based policy unit

The Manitoba Centre for Health Policy and Evaluation (MCHPE) developed POPULIS, a population-based health information system, as a vehicle for changing the way we think about the role of health care as a determinant of health. Serving as a bridge between analysts who produce research and politicians and policymakers who use it, MCHPE has developed a research infrastructure that can transform routinely collected administrative data into policy-relevant information. This paper provides a description of Manitoba and its health care system, as well as how MCHPE was started and how it functions. It describes how we at the Centre work with various databases, from the acquisition process through developing concepts and capabilities to the final validity and sensitivity testing of results. We detail the role of a population-based conceptual framework in challenging those who suggest more spending on medical care is self-evidently desirable.

From research to policy: what have we learned?

The Manitoba Centre for Health Policy and Evaluation has now had eight years of experience as an academic research unit interfacing with policymakers. Most of our research has focused on the determinants of health and on the delivery of health care from a population perspective. Each project that we have undertaken has made its own contribution and reinforced or built on the contribution of others. By communicating closely with policymakers at all levels, while maintaining an arm's-length relationship and the right of publication, MCHPE acts as a knowledgeable non-stakeholder with a commitment to inform the broader public.

Adding up provincial expenditures on health care for Manitobans: a POPULIS project. Population Health Information System

OBJECTIVES

Using the POPULIS framework, this project estimated health care expenditures across the entire population of Manitoba for inpatient and outpatient hospital utilization, physician visits, mental health inpatient, and nursing home utilization.

RESEARCH DESIGN

This estimated expenditure information was then used to compare per capita expenditures relative to premature mortality rates across the various areas of Manitoba.

RESULTS

Considerable variation in health care expenditures was found, with those areas having high premature mortality rates also having higher health care expenditures.