California hospital alters doctors' habits with timely comparative data
Now physicians want even more detailed summaries
Physicians at Beverly Hospital in Montebello, CA, who want to join independent practice associations (IPAs) stand a better chance of acceptance if their length-of-stay numbers are near or better than local averages and their use of ancillary services is not excessive.
At one time, perhaps, these physicians may have sniffed at Barbara Green, director of utilization management at Beverly. But today, she has the information that physicians need for their professional survival, and that makes her a very popular person with them.
Her data reports give physicians a barometer of their practice -- one they can use to show off to IPAs or managed care companies, or one to figure out what areas of their practice need modification. Those behavior modifications certainly do not hurt Beverly's financial viability, either.
Green has worked hard to give physicians good data in an understandable format. She uses some national and regional statistics, but physicians often perceive them as too general and outdated to be useful, she says. The numbers that gain physicians' attention are current statistics on their practice and their peers in the hospital, which they receive in biannual reports from Green. They find meaning in statistics when they see how much a procedure actually costs and how much payers reimburse for each DRG, in a simple profit and loss picture.
Doctors see hospital's profits and losses
"Doctors understand money," Green says. "Money is a common language. It is no different than how they run their offices or their homes."
The key aspect of Beverly's reports is that they reflect the hospital's costs -- not patient charges -- vs. reimbursement. "We wanted the doctors to know whether we were making a profit or loss for every patient in our facility and what the number was," Green says.
For example, Figure 1 (see p. 39) shows part of Green's biannual report to an individual physician, called Dr. Doolittle here for illustrative purposes. This physician lost a total of $87,343 for Beverly (see A under gain/loss column). He had admitted 30 patients to Beverly. With this information, Doolittle can see that his practice habits are a drain on the hospital's fiscal vitality. Meanwhile, in Figure 2, Dr. Doomuch sees that Beverly made $148,131 on the 90 patients he sent to Beverly (see E under gain/loss column).
Physicians may not have seen a hospital's profit and loss statement as something relevant to their private practice in the past. Increased competition, however, has physicians concerned about the viability of the hospital, which they rely on directly or indirectly for the survival of their practice.
"In my own practice, I know that what I charge sometimes has little relationship to what I receive," says Daniel Honigman, MD, FAAFP, a family practitioner in private practice and a Beverly staff member. "My real concerns are what my costs are vs. my receipts. With regard to Beverly's profit and losses, we're involved with a community hospital that we like, support, and want to see continue into the future. Right now, hospitals are fighting for survival."
Honigman acknowledges the "love/hate" relationship that hospitals and physicians have shared over the years, but realizes they both face threats to their future existence. "Survival wasn't an issue [15 to 20 years ago], or it was not as threatening as it is now," he says. "Now, hospitals close frequently. You have to be concerned with that. . . . We'd like to see hospitals come into the future and be partners in a different sort of medicine. So, we worry about their viability."
Facing the reality of managed care
Historically, hospitals and physicians were paid on a fee-for-service basis, and insurance companies reimbursed that fee or a set percentage of that fee. When Medicare introduced DRGs, this precipitated a change. The federal health care program set out flat fees for particular treatments (see Hospital Peer Review, February 1995, p. 30) regardless of how long a treatment took or how much it cost.
Private insurers -- which took the brunt of cost shifting by clinicians and hospitals to compensate for lower Medicare payments -- followed suit, paying a discounted fee for service, monitoring utilization more closely, or contracting for a global rate. "The bill is not terribly valid anymore," Green says. "It does not really matter what is on the bill. You could have [an astronomical figure] on the bill, but you are only going to get paid several thousand [dollars]."
Patient charges are not completely useless, though. As a gauge of utilization, charges do serve a purpose. In Figure 1, Doolittle can see that his average charges were $27,633 (see B under average total charges), which were $9,119 more than the average charges for other physicians with the same DRGs (see C under average total charges). He can see similar information for the ancillary services he used and average length of stay. With Green's reports, Doolittle now can see that when he treats a patient with a urinary tract infection, his average patient charges -- based on the four patients he treated in this six-month period -- were more than $2,000 over what his colleagues charged on average for the 78 patients they saw with DRG 320 (see D under total average charges). Not only that, but Doolittle used more ancillary services, and his patients stayed in the hospital more than a day longer on average. In a separate report, he can see average totals for all of his peers at Beverly (see Figure 3, p. 40).
Focus on top DRGs only
In order to use time efficiently, Green reports only on her hospital's top 50 DRGs and focuses on the top 25, which account for about 30% of Beverly's discharges. DRGs such as new mothers with well babies are not included in the reports because their lengths of stay vary little and they don't present utilization questions. Green uses the databank company HCIA of Baltimore to compile her data. HCIA creates the comparative charts and puts the information in a book format, which is then presented to the physicians.
When a physician's utilization seems out of line with his or her peers on a particular treatment, Green creates a report listing all patients the physician saw for that particular DRG. She checks to see if utilization tended to be above the average in all cases or if there were one or two special cases that significantly skewed the numbers. "You just can't start saying, 'This shouldn't have happened,' if [a physician] has multiple complications that you don't know about," she says.
These figures are not used to bang the physician over the head, Green stresses. "When they are presented, they are presented as an informational tool." Physicians must perform at least three procedures in a DRG to have it included in the report, and reports use anonymous physician numbers. She is not looking to gun down or humiliate overutilizers. Through the report, Green says she is looking to help physicians practice better in a managed care environment and produce the best outcomes possible.
The figures that show overutilization also show significant underutilization, Green points out. "We look at every patient that returns to the hospital within 15 days," she says. "We look to see if the patient was stable, if there was a discharge plan, if care at home was in place, and if the patient had a chronic problem and readmission was unavoidable." Physicians trying to lower their charges and length of stay numbers by shortchanging their patients with inadequate treatments or discharging patients too early will be uncovered.
A key to success, Green stresses, is to not only point out overutilization or underutilization of health care services. When physicians with less desirable numbers reduce their reliance on ancillary services or lower their average length of stay, utilization managers should notify physicians immediately to report that their efforts are paying off, she says. This encourages physicians to continue the difficult process of self-evaluation and proves to other physicians that using utilization review numbers will not poison their practice.
Honigman and his patients have been beneficiaries of utilization review data. While he has used the information to address his approach to various procedures, his treatment of hospitalized diabetes patients provides a good example of using data to make changes.
Physician discovers LOS problem
Upon receiving one of Green's biannual reports, Honigman saw his hospitalized diabetic patients had an average length of stay longer than his peers with the same type of patients. "I started looking at that more carefully and have altered the way I [treat them]," he says.
He had been checking sugars four times a day and giving insulin doses using a sliding scale -- a standard treatment method. Looking at the results of his peers, however, he saw he could do better. He did a literature search for information on getting blood glucose levels under control faster.
"What I realized was that I was chasing blood sugars and I wasn't getting good control," Honigman says. "This was prolonging my length of stay because you really need some semblance of blood sugar control before you send patients home, especially if there are other concurrent illnesses."
Based on his search results, Honigman started patients on NPH (intermediate-acting insulin) more quickly and depended less on the sliding scale, which uses short-acting insulin based on current blood glucose readings. "[NPH] has allowed me to get more rapid control of most of my patients' blood sugars no matter what their other problems may be, and reduced the length of stay," he says. "[Without the utilization report], I might never have recognized there was a problem."
Green isn't stopping with the current version of this report. In fact, physicians like Honigman are demanding current data comparing Beverly's utilization and outcomes with other hospitals in the market. He suggests a more graphical format would be helpful.
"I need more information, and I need to compare it with other institutions," Honigman says. "I need to look more to outcomes. It has evolved to the point where [Beverly's reports] are not adequate for me anymore. We're ready to move on to the next step."
[Editor's note: For more information about HCIA, contact them at 300 E. Lombard St.,
Baltimore, MD 21202; (800) 568-3282.] *
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