Reported Variation in Hospital Billing Quality

This study examines how US hospitals perform on billing quality measures, including legal actions taken by a hospital to collect medical debt, the timeliness of sending patients an itemized billing statement, and patient access to a qualified billing representative.

Transparency, Accessibility, and Variability of US Hospital Price Data

This cross-sectional study evaluates the compliance of hospitals with a Centers for Medicare & Medicaid Services ruling mandating that hospital chargemasters be publicly available in a machine-readable file.

A better way to measure volume--and benchmark costs

Equivalent patient units is a more reliable measure of a hospital's patient volume than adjusted discharges or adjusted patient days because it better accounts for both inpatient and outpatient volumes. Three elements are required to calculate equivalent patient units: equivalent discharges, equivalent visits, and the payment ratio. All of these elements are available through publicly available data, making it possible for hospitals to immediately adopt this new metric and, thereby, better understand their potential for savings.

Economic factors converge: force hospitals to review pricing strategies

The US hospital service price structures are complex and tend to be significantly higher than the actual cost to provide the service. Health care consumers have been given more authority to drive health care decisions. Transparency in health care is forcing hospitals to critically review and substantiate service prices. It is vital that US hospitals review their pricing strategies in order to continue as strong leaders in the health care market.

Informal payments and the financing of health care in developing and transition countries

Informal, under-the-table payments to public health care providers are increasingly viewed as a critically important source of health care financing in developing and transition countries. With minimal funding levels and limited accountability, publicly financed and delivered care falls prey to illegal payments, which require payments that can exceed 100 percent of a country's median income. Methods to address the abuse include establishing official fees, combined with improved oversight and accountability for public health care providers, and a role for communities in holding providers accountable.

[Health-economic considerations for the use of BMP-2 for spinal surgery in Germany]

INTRODUCTION

BMP-2 can replace autogenous bone grafting in lumbar one-level anterior lumbar interbody fusions (ALIF). The current G-DRG system does not reimburse the upfront price of 2,970 euro per BMP-2 application for hospitals in Germany. The purpose of the current study was to create a health economic model to evaluate the financial savings for health care providers (hospitals) and health care payers (health care insurance) that can be achieved by the use of BMP-2 in spine surgery.

METHODS

A previously published pooled data analysis was used in which BMP-2 showed significant improvements in the treatment after ALIF surgery compared to autogenous bone grafting, including earlier return to work time and reduced revision rates. These medical findings were transformed into economic data based on the regulations of the German health system of 2005.

RESULTS

The significantly shorter return to work time under BMP-2 treatment generates important financial savings for health care insurances offsetting the upfront prize of 2,970 euro for BMP-2. Savings for hospitals are mainly related to shorter surgery time due to the absence of the bone grafting procedure and faster discharge of the patient.

CONCLUSIONS

The combination of improved medical outcome by BMP-2 treatment for the patient and net savings for the entire health care system in Germany represents a "dominant" strategy from a health economic perspective. This implicates that BMP-2 in ALIF procedures is to be recommended from a health economic point of view for the German health care system.

Procedure to normalize data for benchmarking

INTRODUCTION

The hospital billing system is usually the source for reporting activity counts used in benchmarking efforts. Because billing is associated with a specific procedure, benchmarking data are often reported as procedure-days, procedure-shifts, or procedure-hours. Normalizing (usually to procedure-days) is required when comparing data for benchmarking purposes. For an institution that uses hourly billing, simply dividing procedure-hours by 24 (or procedure-shifts by 2 or 3) will underestimate the procedure-days reported by a daily billing system, because daily billing systems use the convention that any fractional day of service is rounded up to the next higher day. The purposes of this study were: (1) to simulate sets of data and determine the expected error with conversion by simple division, (2) to derive a more accurate procedure for normalizing benchmarking data, and (3) to compare the new normalization procedure to simple division, using simulated and actual data.

METHODS

A reference population of simulated patient data was created using a spreadsheet to generate random start times paired with actual procedure durations (eg, hours of mechanical ventilation) for 5,000 patients. The spreadsheet calculated "true" billable procedure-days and procedure-shifts from the simulated procedure-hours. Next, a resampling procedure was used to simulate the effect of submitting benchmarking data based on various numbers of patients. The resulting sets of data were used to examine the association between sample size and conversion error when converting from procedure-hours to procedure-days and to generate an alternative conversion procedure that uses linear regression to estimate procedure-days from procedure-hours. An additional regression equation was generated from actual patient data, using simultaneously recorded procedure-hours and procedure-days. The set of mean conversion errors for the 2 regression equations was compared using the Mann-Whitney rank sum test.

RESULTS

In general, conversion errors (both systematic and random errors) were smaller with larger sample sizes and with longer service periods, approaching an asymptote at a sample size greater than about 20. Using division, the conversion errors for a sample size of 100 were +/-16% for hourly reporting, +/-11% for 8-hour shifts, and +/-8% for 12-hour shifts. The regression equations for conversion derived from simulated data were as follows. For hourly billing, procedure-days = +/-0.237 + (0.049) (procedure-hours). For 8-hour shifts, procedure-days = +/-0.205 + (0.372) (procedure-shifts). For 12-hour shifts, procedure-days = +/-0.114 + (0.541) (procedure-shifts). Using those regression equations, the conversion errors for a sample size of 100 were +/-1% for hourly reporting, +/-0.2% for 8-hour shifts, and +/-0.2% for 12-hour shifts. The regression equation (for hourly billing) derived from simulated data gave better results than did the equation derived from actual data (median error 0.39 vs +/-2.92, p = 0.013).

Hatch hunts for hospitals. Minnesota is now the main stage in U.S. debate over uninsured billing as a third group of hospitals sign pacts with state officials

Minnesota has become the main stage in the debate over uninsured billing. Forthe third month in a row, state authorities have signed agreements with hospitals to expand discount programs and limit debt-collection efforts. The latest deal means about 75% of admissions there will be covered by such pacts. "We saw this as a positive response to a major public challenge," said Terence Pladson, left, of CentraCare.

Tightrope walk: setting defensible prices

Resolving the conflict between generating a profit and keeping prices reasonable is critical to the financial welfare of the hospital industry. Four steps may make this resolution easier: (1) determine the level of profit required, (2) assess the reasonableness of current costs, (3) assess the reasonableness of current prices, and (4) negotiate more equitable payment arrangements.

What's it worth?

Patients without effective coverage frequently must pay charges for medical services that are higher than the hospital's contracted rates. A national survey of hospitals shows great variation in how charges are set and accommodations made for patients with low income. The government is taking a more active role in examining charging practices. Hospitals can take several steps to help stave off government intervention.

Does pediatric orthopedic subspecialization affect hospital utilization and charges?

In the current climate of health care reform, there is a perception that overspecialization is responsible for increased medical costs. Few studies support the premise that high-quality surgical subspecialization improves the cost effectiveness of care. The purpose of this study was to compare hospital utilization and charges between a pediatric hospital staffed by pediatric orthopedic subspecialists and a community hospital system for the care of closed femur fractures and slipped capital femoral epiphysis (SCFE) in a pediatric population. We reviewed hospital charges and length-of-stay (LOS) data for all children treated for closed femoral shaft fractures and SCFE between 1992 and 1994 within the Intermountain Health Care System (IHC). Within the IHC, there are 23 community hospitals and one children's hospital (PCMC). Patients were matched for age and injury severity. Four of six orthopedic surgeons at PCMC are pediatric orthopedists, but none of the community orthopedists has subspecialty training in pediatric orthopedics. For closed femoral shaft fractures (n = 334), the average hospital charges were less (PCMC, $4,943/Other IHC, $9,031), and length of stay was shorter (PCMC, 2.81 days/Other IHC, 8.91 days) when the child was treated at the children's hospital by pediatric orthopedic subspecialists. For SCFE (n = 63), the average hospital charges were less (PCMC, $2,824/Other IHC, $3,544) and the length of stay was shorter (PCMC, 1.13 days/Other IHC, 1.64 days) at the children's hospital. These data suggest that hospital utilization and charges were significantly decreased if the care was provided by pediatric orthopedic subspecialists in a children's hospital.

The Cincinnati initiative

Nationwide, purchaser coalitions are forming to use their buying clout to reform the delivery of health care. In Cincinnati, a collaborative effort between purchasers and providers is producing profound changes in the local health care market. After the first year in operation, data show a significant overall decrease in length of stay (LOS), a return to single-digit inflation, and intriguing changes in provider practice patterns. These results have been achieved through voluntary hospital and physician practice pattern changes without additional contractual allowances, price controls, or utilization management imposed by the initiative. This article explores the development of the Cincinnati initiative, results to date, lessons learned, and future implications.

Using measurement and feedback to reduce health care costs and modify physician practice patterns

Rising health care costs coupled with an inability to determine what constitutes value in the delivery of health care services lead a group of Cincinnati health care purchasers to seek answers and solutions. The formation of a collaborative effort that includes both purchasers and providers is producing profound changes in the Cincinnati health care market. After one year in operation, data show a significant overall decrease in length of stay, a return to single-digit inflation, and intriguing changes in provider practice patterns.