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Healthcare Payment Systems
Published in Jennifer Doley, Mary J. Marian, Adult Malnutrition, 2023
The principal diagnosis necessitating hospital admission decides the Major Diagnostic Category (MDC) assigned to the patient for that hospital stay.3 Within this MDC, the individual Diagnosis Related Group (DRG) is determined based on details of the patient’s diagnosis and hospital treatment. If the patient is managed medically, the principal diagnosis determines the DRG assignment; if the patient is primarily managed surgically, then the type of surgery will determine the DRG assignment. Secondary diagnoses, known as Complications or Comorbidities (CCs) and Major Complications or Comorbidities (MCCs), can increase the cost of care above what would have been required if the patient only needed treatment for the principal diagnosis. When these secondary diagnoses are documented, treated, and coded, the patient may be assigned to a different severity level within the DRG grouping; this is then known as the Medicare Severity – DRG (MS-DRG). See Figure 14.1. A higher payment is given to hospitals for MS-DRGs associated with a CC, and an even higher payment for MS-DRGs associated an MCC.3
Ambulatory Systems
Published in Salvatore Volpe, Health Informatics, 2022
Curtis L. Cole, Adam D. Cheriff, J. Travis Gossey, Sameer Malhotra, Daniel M. Stein
Analogous to diagnosis-related group (DRG) reimbursement in inpatient settings, one of the more complex features in ambulatory order entry is “medical necessity” checking. The quotation marks here are to emphasize that the definition of medical necessity is an insurance construct and not a clinical assessment per se. The primary impetus for this requirement comes from Medicare. Through a process called National and Local Coverage Determinations (NCD/LCD; previously called Local Medical Review Policies [LMRP]), Medicare will only reimburse for tests that it deems medically necessary.28 Because these rules frequently do not meet the needs of individual patients, physicians need to be alerted when they are ordering a test that is not covered. For example, a patient with cancer might need heart tests prior to taking a cardiotoxic drug. It would be clinical malpractice not to perform the test, but it may still not be considered “medically necessary” by Medicare in terms of reimbursement.
Organizational Structure, Data, and Academic Health Science Center Transformation
Published in Steven A. Wartman, Confluence of Policy and Leadership in Academic Health Science Centers, 2022
Robert I. Grossman, Robert Berne
The strongest correlation with hospital margin is 1/average length of stay (ALOS). ALOS is a common metric that is used to evaluate hospital quality, efficiency, and costs. It is a critical factor in hospital cost structure and quality care. Embedded in ALOS measures are a plethora of issues and processes, including hospital complications and efficiencies. In many circumstances, hospitals receive a fixed fee for a particular diagnosis-related group. The best-case scenario for the hospital is to admit and discharge the patient in the shortest possible time using the least number of tests, treating the patient appropriately, and obtaining the best outcome. Anything interfering with the “ideal” scenario adds expenses, erodes margin, and affects outcome. Neither physicians nor nurses have much incentive to rapidly move patients along. By not paying on a per diem basis the “risk” is transferred to the hospital.
Cluster analysis identifies unmet healthcare needs among patients with rheumatoid arthritis
Published in Scandinavian Journal of Rheumatology, 2022
N Mars, AM Kerola, MJ Kauppi, M Pirinen, O Elonheimo, T Sokka-Isler
The healthcare utilization data involved a system similar to diagnosis-related group (DRG), one suitable for both inpatient and outpatient care. This was used for grouping all the RA patients’ diagnoses for fiscal year 2014, and for estimating the respective health service-related direct costs (€; price level for 2014). The cost estimation tool acknowledges disease category, age, gender, healthcare unit and provider, and procedures, and comprises all public healthcare contacts: both primary and speciality care, inpatient and outpatient care, the emergency department, and contacts with all healthcare professionals (physicians, nurses, and rehabilitation workers). Additional details of both data sets have been described previously (10). We combined the data sets using the unique Finnish national identification numbers, selecting RA patients with at least one healthcare contact in 2014. As healthcare utilization data were obtained for 2014, our inclusion criteria were patients diagnosed with RA before or in 2014, who had visits to the rheumatology clinic within 5 years prior (2010–2014) to collection of cost data. To capture patterns of persistent disease activity, pain, and physical disability, we used all individual-level clinical data available for these patients within the registry (2007–2016).
Preeclampsia in Switzerland: a cost analysis in two hospitals
Published in Journal of Medical Economics, 2020
Markus Hodel, Patricia R. Blank, Petra Marty, Olav Lapaire
In Switzerland, hospital costs are covered both by health insurance companies (45%) and the government (55%). Inpatient costs are based on diagnosis-related groups (DRGs, http://www.swissdrg.org/); as such, all services are covered within one DRG position. A DRG position represents an average patient which implies that some patients might need more or less resources, respectively. According to the DRG position, an average preeclampsia patient remains 4.1 days (range: 2–10 days) in the hospital and is covered with a DRG position of 0.415. The DRG position is multiplied by the base rate which varies among hospitals. Normally, the base rate is higher among University hospitals which also leads to a higher reimbursement tariff. On average, a hospital is reimbursed with approximately CHF 4,000 for an average preeclampsia case. Hospitals can received additional and lower reimbursement for patients staying longer or shorter in hospitals, respectively.
Economic burden of hospital malnutrition and the cost–benefit of supplemental parenteral nutrition in critically ill patients in Latin America
Published in Journal of Medical Economics, 2018
Maria Isabel Toulson Davisson Correia, Mario Ignacio Perman, Lorenzo Pradelli, Abdul Jabbar Omaralsaleh, Dan Linetzky Waitzberg
A cost–benefit analysis based on clinical data from prior studies and country-specific cost data showed that administration of SPN to critically ill adults with persistent caloric deficits on EN alone a meaningful cost benefit which is principally mediated through an improvement in cumulative caloric balance and a corresponding reduction in the risk of HAI. Model-derived estimates for clinical outcomes and resource utilization suggest that the administration of SPN to ICU patients who fail to reach ≥60% of the targeted nutrition delivery with EN would yield an estimated annual cost reduction of $10.2 million across the eight Latin American countries compared with continued administration of EN alone. On average, the use of SPN resulted in net savings of $194.50 per supplemented patient, with the cost of SPN more than offset by the reduced cost of antimicrobial therapy and the shorter duration of stay in the ICU and ward. The latter benefit is particularly important, as limited bed capacity, increased demand and an increasing trend toward the use of diagnosis-related group (DRG)-based reimbursement in Latin America create a powerful incentive for public hospitals to minimize the duration of hospitalization. Coupled with the relatively low rate of SPN use observed in the Latin America Screening Day study26, the cost–benefit analysis suggests that both improved clinical outcomes and significant cost savings can be achieved through the adoption of SPN as a therapeutic strategy in critically ill patients who fail to receive adequate nutrient intake from EN.