Patients’ increased severity of illness drives up LOS around the country
Disturbing trend forces re-examination of QI and cost reduction
The first concrete evidence that traditional utilization review has outlived its usefulness is here. According to data compiled by San Francisco-based HCIA and New York-based William M. Mercer as part of their 100 Best Hospitals study, average lengths of stay (LOS) have begun to creep up for the first time in 20 years — and increased costs are likely to follow.
For many hospitals, the time of quick fixes and easy answers is over, experts say. If quality improvement efforts are to continue to yield positive results, case managers will have to look at the concept of quality in a whole new way.
The bad news is that the rise in LOS, while small (from an all-time low in 1997 of about 3.8 days to 3.9 in 1998), almost certainly results from a slow but clear increase in the severity of illness of patients treated in hospitals, says Jean Chenoweth, who until recently served as senior vice president in the consulting division of HCIA. This trend — as well as the trend toward higher lengths of stay — is most apparent in Western states with higher managed care penetration. Concurrently, Chenoweth found, more patients were being shifted to the outpatient setting. "What’s going on is that many patients who can be handled in lower-cost or alternative sites of care are no longer being admitted to the hospital, and the ones who are being admitted to the hospital are increasingly more severely ill," she says.
Severity shift: Only the very sick hospitalized
Chenoweth’s first indication that LOS was increasing came with HCIA’s 1997 study, which detected increases in hospitals where 90% or more of the patients belonged to managed care plans. The 1998 data, however, released in mid-March 1999, shows that "it isn’t just in those hospitals whose patients are in managed care programs anymore. It’s spreading across the entire population," Chenoweth says. "What showed up in the 1997 data expanded and rippled in its effect in the 1998 data." Chenoweth adds that other information management firms have picked up on the trend as well.
"What’s stunning about this change is that probably for two decades, everybody has said that the ultimate effect of utilization review will be that everybody in the hospital will be very sick," Chenoweth says. "But people said that over and over for 20 years and it never happened. Well, guess what? It finally happened. The severity of illness is higher, and as a consequence, the overall costs will probably increase because of a need for a higher-skilled population of caregivers in the hospital."
The simple stuff is over’
However, that doesn’t mean you should resign yourself to ever-worsening financial outcomes, Chenoweth says. It only means that for now, and particularly for West Coast hospitals, "the simple stuff is over, and their gains in cost reduction are going to come from taking a far more clinical approach to the management of these patients."
Steven Freedman, MD, a national practice leader for quality at William M. Mercer in San Francisco, agrees that cost-containment efforts in acute care will necessarily shift away from simply managing utilization to improving the quality of clinical care. Indeed, Freedman says most hospitals remain in only the most basic stages of quality improvement. For these hospitals, Freedman advises looking not only at the overutilization of resources — the most traditional focus of utilization review — but at underutilization and misutilization as well.
Concerning underutilization, Freedman contends that, ironically, some hospitals lose money because they don’t allocate enough resources in certain areas. For example, he cites data from the best hospitals study on why the nation’s elite facilities tend to achieve better clinical outcomes for their myocardial infarction patients. Surpris ingly, it wasn’t because of any technological edge or a higher rate of bypass operations. Rather, it was because the best hospitals tended to prescribe beta blockers and aspirin more often and more effectively. "These drugs cost pennies," Freedman says. "But their use resulted in a better outcome, associated with shorter hospitalization."
Making medical errors a quality issue
Meanwhile, misutilization — costs resulting from medical errors and other mistakes — represents a potentially huge opportunity for cost savings, but to date few hospitals have addressed it from a quality improvement perspective, Freedman says. The now-famous Harvard Medical Practice Study of 1985 found that 4% of hospital patients suffered injuries due to medication errors and 14% of those patients died. The study also found that 12% of patients suffered adverse drug events or near-misses. Several more recent studies have found serious or potentially serious medication errors among at least 7% of patients. And one study claimed that the cost of medication errors in terms of additional treatment and hospital days amounted to an average of $4,000 per case.
"Think about 7% of admissions having an extra $4,000 tacked onto them," Freedman says. "And all of that’s preventable."
Daniel T. Risser, PhD, a senior behavioral scientist at Dynamics Research Corp. in Andover, MA, says case managers can be instrumental in reducing errors. Indeed, Risser has been a key part of the innovative MedTeams program, which applies behavioral science techniques to the hospital emergency department setting to cut the rate of medication errors.
According to Risser, some basic principles of quality improvement and old-fashioned teamwork have helped MedTeams hospitals save an average of $3.45 for every patient who visits the emergency department — a huge cost savings over time. These principles include:
• Use communication protocols that verify information.
• Make informal agreements with peer caregivers to check each other’s actions.
• Whenever you think a fellow caregiver has lost situational awareness, offer information to re-establish it.
• Review the priorities set for a patient’s care plan to be sure the priorities make sense.
• Track whether organizations you recommend and use have effective teamwork systems in place. (For more error-reducing approaches, see related story, p. 83.)
Examine greatest cost drivers first
What’s most important in looking for additional innovative ways to contain costs is to prioritize effectively, Freedman says. That means taking the basic steps of looking first at your greatest cost drivers, such as the operating room, intensive care, and pharmacy, before moving on to other areas. For each priority, compare basic data on lengths of stay and costs per case to national benchmarks and then work to assess why a gap exists.
Interestingly, Chenoweth has found in her research that in areas such as the use of antibiotics to prevent postoperative wound infections, the nation’s best hospitals displayed a high level of similarity, whereas other hospitals did not. "Standardization will take place, and is beginning to take place," she says. "But it is my sincere hope that it is based on actual practice tied to outcomes, so that we assure good results for the patients."
For more information, contact:
Steven Freedman, MD, national practice leader for quality, William M. Mercer Inc., 3 Embarcadero Center, Suite 1500, San Francisco, CA 94111. Telephone: (415) 743-8758.
Jean Chenoweth, former senior vice president, HCIA Inc., 300 East Lombard, Baltimore, MD 21202.
Daniel T. Risser, PhD, senior behavioral scientist, crew performance group, Dynamics Research Corp., 60 Frontage Road, Andover, MA 01810. Telephone: (978) 475-9090, ext. 1421.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content