Bringing psychiatric patients into the Medicare prospective payment system: alternatives to DRGs

Diagnosis-related groups: implications for psychiatry

The escalating cost of medical care in most industrial countries has given impetus to several different strategies designed to impose limitations on cost and introduce efficiency into health care systems. In the United States of America, legislation was passed in 1983 to introduce a system of prospective payment for Medicare hospital expenditures. This change was a departure from the previous cost based reimbursement method and was based upon a categorisation of medical conditions into discrete groups termed diagnosis-related groups (DRGs). The intention of the American Congress in passing the legislation was to encourage hospitals to reduce cost without sacrificing quality of care.

Challenges for policy makers and organizational leaders: addressing trends in mental health inequalities

We typically think of acutely and chronically mentally ill patients as those who belong in psychiatric hospitals and the latter category of patients belonging in "regular" hospitals, but the intersection of physical and mental illness draws attention to important challenges for policy makers and organizational leaders. This article illuminates some broad trends in the health status of people with mental illnesses, canvasses important features of inequalities suffered by people with mental illnesses, and suggests strategies for systemic reform. Most reform recommendations I offer are in the area of healthcare organization leadership and management. Other key reforms will likely be legislative, regulatory, and insurance-related. Social and cultural reforms in organizational practices and structures will also be critical.

DRGs and other patient-, service- and area-level factors influencing length of stay in acute psychiatric wards: the Veneto Region experience

PURPOSE

This study aimed to identify services-related and area-based measures together with socio-demographic factors that could improve diagnosis-related groups in explaining length of stay variability in general hospital psychiatric units in Veneto Region (North East of Italy).

METHODS

Data were collected from the regional hospital discharge records database. A hierarchical multiple regression model with only diagnosis-related groups as predictors of actual and ln-transformed length of stay was compared with a second model in which patient-, service- and area-level variables were included. Local health district was used as group-level in the hierarchical multiple regression analysis.

RESULTS

The only diagnosis explains 6.4% of actual length of stay total variance (14.8% for ln-transformation). In the second model length of stay resulted related also to gender, age, severity of hospitalization, patient's local health district, number of psychiatrists, psychologists, hospital attendants/nurses, social workers and educators in the general hospital psychiatric units, number of outpatients in each local health district and percentages of divorced and single people, with almost a 2% point increase on actual length of stay in explained variance (5% point increase for ln-transformation).

CONCLUSIONS

For the first time the hospital discharge card regional survey of all public acute inpatient psychiatric facilities in Veneto Region were used. The innovative aspect of this study was the attempt to investigate the relationship between length of stay and other indexes, characterizing not only the inpatient facilities, but also the resident population structure in each area. The information about factors that influence length of stay can be useful to inform service planning and resource allocation.

Determinants of length of stay for psychiatric inpatients: analysis of a national database covering the entire Korean elderly population

OBJECTIVE

In a rapidly aging society, inappropriately long geropsychiatric inpatient hospitalization is a challenging concern for mental health policy-makers and researchers. This study aimed to investigate patient and institutional factors affecting geropsychiatric inpatient length of stay (LOS), providing an overview of current geropsychiatric health care system in South Korea.

METHODS

This retrospective, population-based, cross-sectional study analysed nationwide reimbursement claim databases covering the entire elderly population of Korea between January 2005 and June 2006. Given the nested structure of the data, a multivariate multilevel regression analysis was performed.

RESULTS

The average LOS was 128 days. Males, patients with schizophrenia, and those enrolled in a National Medical Care Aid program tended to have longer hospital stays. Patient age was negatively related to LOS. Institutional variables related to longer hospitalizations included a psychiatric hospital, a higher number of beds, fewer human resource employees, a higher proportion of male, oldest old, and patients with dementia.

CONCLUSIONS

Our results suggest that policies targeting geropsychiatric patients diagnosed with schizophrenia, enrolled in National Medical Care Aid programs, and admitted to psychiatric hospitals could reduce LOS. Additionally, the impact of the patient composition of a medical institution on LOS needs to be closely investigated.

Development and evaluation of a case group concept for inpatients with mental disorders in Germany: using self-report and expert-rated instruments

The aim of this study was to evaluate a case-mix system to classify inpatients with mental disorders in Germany by means of self-report and expert-rated instruments. The use of case-mix systems enhances the transparency of performance and cost structure and can thus improve the quality of mental health care. We analysed a consecutive sample of 1677 inpatients with mental disorders from 11 hospitals using regression tree analysis. The model assigns patients to 17 groups, accounting for 17% of the variance for duration of stay. Patients with eating disorders had a longer duration of stay than patients with anxiety disorder, duration of mental illness of less than 3-5 years, lower levels of interpersonal problems and higher occupational position. The results showed that besides diagnosis, variables such as duration of illness and interpersonal problems are important for classifying inpatients with mental disorders. The results of the study should be critically reviewed regarding the empirical results of other studies and the appropriateness of case group concepts for inpatients with mental disorders.

Risk-adjusting outcomes of mental health and substance-related care: a review of the literature

Risk adjustment is increasingly recognized as crucial to refining health care reimbursement and to comparing provider performance in terms of quality and outcomes of care. Risk adjustment for mental and substance use conditions has lagged behind other areas of medicine, but model development specific to these conditions has accelerated in recent years. After describing outcomes of mental health and substance-related care and associated risk factors, we review research studies on risk adjustment meeting the following criteria: (1) publication in a peer-reviewed journal between 1980 and 2002, (2) evaluation of one or more multivariate models used to risk-adjust comparisons of utilization, cost, or clinical outcomes of mental or substance use conditions across providers, and (3) quantitative assessment of the proportion of variance explained by patient characteristics in the model (e.g., R(2) or c-statistic). We identified 36 articles that included 72 models addressing utilization, 74 models of expenditures, and 15 models of clinical outcomes. Models based on diagnostic and sociodemographic information available from administrative data sets explained an average 6.7% of variance, whereas models using more detailed sources of data explained a more robust 22.8%. Results are appraised in the context of the mental health care system's needs for risk adjustment; we assess what has been accomplished, where gaps remain, and directions for future development.

Needs-based planning: evaluation of a level-of-care planning model

With the closure of a number of provincial psychiatric hospitals planned, the Ministry of Health of Ontario has commissioned a series of planning projects to identify alternative placements for current hospital patients. The goal is to match need to care in the least restrictive setting. A systematic, clinically driven planning process was implemented that involved three steps: development of a continuum of levels of care representing increasingly intensive and more restrictive supports, development of criteria and decision rules for placement, and comprehensive needs assessment of current patients using the Colorado Client Assessment Record. Results showed that only 10% of current inpatients need to remain in the hospital, and over 60% could live independently in the community with appropriate supports. Evidence supports concurrent validity of the planning model, but further work is needed to assess whether recommended levels of care effectively meet consumer needs in the least restrictive setting.

DRGs and Australian psychiatry

The introduction of diagnosis related groups (DRGs) as a basis for funding in the United States has revealed several shortcomings in current DRG systems. Overall, DRGs have proven to be poor predictors of cost, accounting for approximately one third of the variation in cost and length of stay for surgical DRGs and falling to less than 10% for medical DRGs. Their ability to contain costs also remains uncertain, with savings associated with reductions in length of stay being offset by increased readmission rates. Given the increasing commitment of government to casemix approaches to funding it is suggested that psychiatry should participate in the process of solving the problems so far identified with DRG systems. Participation would, it is hoped, create a focussed debate about the provision of a "gold standard" of care for all patients. The evaluation and refinement of existing DRGs is urgently needed and could utilise a number of comprehensive data bases which already exist across the country. Alternatives to diagnosis such as functional status and treatment needs should also be explored.

Mental health services in transition: the United States and the United Kingdom

Mental health services are of interest not only because of the large burden they impose, but also because they have been subject to more change than virtually any other type of health service over the past four decades. Although both the US and UK have taken to ‘deinstitutionalisation’ with enthusiasm, the US has so far proceeded somewhat further down that road than the UK. While both countries face similar problems, the NHS and Community Care Act 1990 may now lead to considerable further changes in the UK.

Assessing need for extended psychiatric hospitalization

The authors developed a set of rating scales to assess a wide range of variables believed by clinicians to influence the optimal length of hospital stay. They report the results of interrater reliability studies, a factor analysis of the scales, and a correlational study of the factors with actual length of stay. They describe the potential applications of the scales to clinical practice and research.

Do clinicians agree about who needs extended psychiatric hospitalization?

This report examines the level of agreement among 194 staff members of The Menninger Clinic and Harding Hospital about the optimal length of stay for 71 types of patients selected on the basis of hypothesized suitability for various lengths of hospitalization. There were differences of opinion associated with hospital affiliation and professional discipline, but there was sufficient consensus to enable the development of comprehensive criteria for predicting required length of hospitalization. The validity of these criteria will be tested in a future treatment outcome study.

Indications for extended psychiatric hospitalization: a study of clinical opinion

The authors previously developed a conceptual model of factors bearing on length of stay from clinicians' vignettes describing patients considered ideal candidates for various lengths of stay. The previous study was conducted at The Menninger Clinic, the present study at Harding Hospital. The two hospitals provide a worthwhile contrast because Menninger specializes in long-term (LT) stays (averaging 1 year) and Harding in intermediate-term (IT) stays (averaging 2 to 3 months). The Harding findings generally replicated and complemented the Menninger results, and the authors used the combined data to generate a hypothesized set of general indications for various lengths of stay in these private psychiatric hospitals.

Simple measures of case mix in mental health services

The concept of Case Mix in community mental health service program evaluation can be useful in mental health program evaluation if the definition of case mix is expanded beyond Diagnostic Related Groups (DRG), where DRG is solely based upon diagnosis and length of hospitalization stay. A case mix definition based upon two principal characteristics is offered. One characteristic is clinical status defined in terms of diagnostic signs and symptoms, level of functioning, and age. The other characteristic is typical treatment strategy for a given period of time (e.g., 13 weeks). Two cases mixes typical of services designed for the chronically mentally ill are discussed.