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COST OF HEALTH CARE: Specialist visits to hospitalized Medicare patients cost over $1.3 billion in 2014

What is the cost to the nation to bring in specialists to consult on hospitalized Medicare patients?  This question was studied based on analysis of over 700,000 discharges from over 4500 U.S. hospitals in 2014.  Medicare Part B payment for consultative care was found to represent 41.3 percent of all physician visits during the hospital stays.  The total dollar amount was estimated to be $1.3 billion.  These figures are thought to be underestimates because the patients studied excluded surgical patients and because there was no analysis of downstream costs – such as additional diagnostic testing and follow-up visits.  Characteristics of hospitals which were found to be more likely to have higher rates of consultative visits included those in the Northeast, those in urban areas and teaching hospitals.

Source: Ryskina, K.L., Association of Medicare spending with subspecialty consultation for elderly hospitalized adults. JAMA Network Open, 2(4).  Click here for full text:  https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2729802 Posted by AHA Resource Center (312) 422-2050 rc@aha.org

Investing in social services as a core strategy for health organizations: developing the business case

Social determinants of health — economic stability, neighborhood and physical environment, education, food, transportation, community and social context — can all impact health outcomes. With the growing emphasis on population and community health, how do hospitals and health systems make the business case for investing in social services to improve the health of their patients and communities?

A new report from the KPMG Government Institute focuses on building the business case for social services investment by healthcare organizations of all types. After defining social services investment and its common barriers, the guide focuses on these six steps:

  1. Identifying what to invest in
  2. Determining what success is by selecting the care outcomes
  3. Measuring costs of care
  4. Determining the appropriate investment model
  5. Setting up the return on investment approach
  6. Sensitivity analysis and investment kick-off

The appendices include several short business case examples from different types of healthcare organizations.

Source: Investing in social services as a core strategy for healthcare organization: developing the business case – a practical guide to support health plan and provider investments in social services. March. 2018. http://www.kpmg-institutes.com/ content/dam/kpmg/governmentinstitute/pdf/2018/investing-social-services.PDF. Also available from the Commonwealth Fund at http://www.commonwealthfund.org/~/media/files/publications/other/2018/investingsocialservices_pdf.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Average Cost of a Hospital Stay, Emergency Room Visit, Physician or Dental Office Visit, or Home Care Service

In 2014, the mean cost for a hospital stay was $13,450, with an average out-of-pocket expense of $351. That’s according to Medical Expenditures Panel Survey [MEPS] Household Component data available from the Agency for Healthcare Research and Quality.

An emergency room visit averaged $1,048 in 2014, with $95 of that in out-of-pocket expenses.

A hospital outpatient visit expense averaged $927 with a $54 out-of-pocket cost, while an office-based physician visit totaled $222 with $29 out-of-pocket. The mean out-of pocket expense for a dental visit was $132 of the total visit cost of $295.

Finally, home health care expenses averaged $1,454 per month for those who had the expense during the year.

MEPS data on household medical expenditures is also available for earlier years.

Source: Expenditures per event by health care service type. Medical Expenditures Panel Survey, Household Component summary tables, Agency for Healthcare Research and Quality, accessed Feb. 15, 2017 at https://meps.ahrq.gov/mepsweb/data_stats/quick_tables_results.jsp?component=1&subcomponent=0&year=-1&tableSeries=9&searchText=&SearchMethod=1&Action=Search

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

HOSPITAL BUDGETS: Hospital spending by category 2015

The following data are based on an analysis of the Centers for Medicare and Medicaid Services (CMS) 2015 inpatient market basket update projections.  A base year of 2010 weights were used.

Hospital Spending (by percent)

  • 59.1  Wages and benefits
  • 14.1  Other products (for example, food, medical instruments)
  •   9.1  Professional fees
  •   6.9  Prescription drugs
  •   3.7  All other: labor intensive
  •   3.7  All other: non-labor intensive
  •   2.1  Utilities
  •   1.2  Professional liability insurance

Source: American Hospital Association. (2017, February). The cost of caring. Click here: http://www.aha.org/content/17/costofcaringfactsheet.pdf  Posted by AHA Resource Center (312) 422.2050 rc@aha.org

CANCER: $158 billion cost of cancer care in 2020

Cancer treatment is expensive.  The National Cancer Institute estimates that cancer care costs will increase from $125 billion in 2010 to $158 billion in 2020.  This is partly due to the aging of the population, to better control of other serious diseases, and to the development of new chemotherapy and other treatment options.  Among the reasons that the trend toward costly chemotherapy is expected to continue to escalate is that oncology drugs are being used in combination.  There is one newly approved combined treatment for advanced melanoma that is expected to cost the patient $250,000 or so in the first year.  Yes, you read it right – a quarter of a million dollars.

The American Society of Clinical Oncology has published a framework that can be used to assess how valuable a cancer treatment might be.  The framework is intended to be used by the patient and the physician together in partnership to help establish the cost-benefit of different options.

Sources:

Schnipper, L.E., and others. (2015). American Society of Clinical Oncology statement: A conceptual framework to assess the value of cancer treatment options. Journal of Clinical Oncology. Click here : http://jco.ascopubs.org/content/early/2015/06/16/JCO.2015.61.6706.full.pdf

Gittlen, S. (2016, Jan.-Feb.). Cancer: Aligning costs and care. HealthLeaders, 19(1), 47-50. Click here for the magazine http://www.healthleadersmagazine-digital.com/healthleadersmagazine/january_february_2016?pg=1#pg1  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

HIP REPLACEMENT: You might have to go to school first

Total joint replacement procedures – hips and knees – are commonly performed on Medicare patients, costing an estimated $7 billion annually for the hospital care alone.  The Centers for Medicare & Medicaid Services (CMS) has developed a bundled payment pilot initiative with mandatory participation for 67 selected health care markets nationwide.  One cost-reduction approach that is being tried by several providers is the idea of having elective hip and knee patients go to an “academy,” or otherwise receive patient education, before surgery to remove or lessen risk factors that might complicate their recovery.  Among the hospitals and health systems trying this out are: DCH Regional Health System (Tuscaloosa, Ala.), Catholic Health Initiatives (Englewood, Colo.), and BayCare Health (Clearwater, Fla.).

For more information about the CMS initiative, click here: https://innovation.cms.gov/initiatives/cjr

Source: Evans, M. (2016, Mar. 28). Ready or not, the bundled-payment challenge is about to start. Modern Healthcare, 46(13), 8-9.  Click here for publisher’s website: http://www.modernhealthcare.com/article/20160326/MAGAZINE/303269996  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Top 10 Issues Facing Community Hospital CEOs

Last month the American College of Healthcare Executives released the results of its annual CEO survey on the top concerns confronting community hospitals. The most pressing concerns of the CEOs in 2015 were:

  1. Financial challenges
  2. Patient safety and quality
  3. Governmental mandates
  4. Personnel shortages
  5. Patient satisfaction
  6. Physician-hospital relations
  7. Access to care
  8. Population health management
  9. Technology
  10. Reorganization [mergers, acquisitions, restructuring, partnerships]

Financial challenges has remained the top concern when compared to 2013 and 2014 surveys. Transition from volume to value, Medicaid reimbursement, bad debt, and increasing costs were among the financial challenges most often mentioned. Engaging physicians in improving the culture of safety/quality and in reducing clinically unnecessary tests and procedures were top concerns related to patient safety and quality.

Access to care and reorganization were new to the top 10 list in 2015, and personnel shortages rose to 4th place on the list, up from the 10th spot in 2014.

Source: Top issues confronting hospitals in 2015. American College of Healthcare Executives, Feb. 2, 1016. http://ache.org/pubs/research/ceoissues.cfm [press release: http://ache.org/pubs/Releases/2016/top-issues-confronting-hospitals-2015.cfm]

Posted by AHA Resource Center (312) 422-2050, rc@aha.org