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Ann Thorac Surg 2000;70:182-185
© 2000 The Society of Thoracic Surgeons
a Department of Anesthesiology, St. Vincent Mercy Medical Center, Toledo, Ohio, USA
Address reprint requests to Dr Engoren, Department of Anesthesiology, St. Vincent Mercy Medical Center, 2213 Cherry St., Toledo, OH 43608
e-mail: engoren{at}pol.net
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Abstract |
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 Top Abstract IntroductionMaterial and methodsResultsCommentReferences |
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Methods. By retrospective analysis, the complete billing records of all 15 ventilator-dependent patients were obtained and abstracted for each item used. The drug or supply acquisition cost and direct variable cost of other items and labor were used to compute the daily and total marginal cost for each patient.
Results. Of 15 patients, 13 were discharged alive and liberated from mechanical ventilation. Length of stay was 28 ± 23 days. Average per diem cost was $438.77 ± 152.34. Costs were significantly higher in patients who required hemodialysis: $555.31 ± 491.04 versus $380.54 ± 272.25 (p < 0.01).
Conclusions. Ventilator-dependent patients can be inexpensively liberated from mechanical ventilation in a stepdown unit.
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Introduction |
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TopAbstractIntroductionMaterial and methodsResultsCommentReferences |
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Material and methods |
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TopAbstractIntroductionMaterial and methodsResultsCommentReferences |
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Itemized hospital bills were obtained for all patients. The hospital acquisition cost of all pharmaceutical agents was obtained from the pharmacy. The hospital’s accounting department supplied direct variable labor and material costs for all other items. Services such as speech, occupational, and physical therapy were priced at the wage and benefit scale of the person providing the service. Registered nurse labor costs were based on the stepdown unit’s staffing ratio of 2:1 (2 patients to 1 nurse) during the day and 3:1 at night for these patients. Equipment that is permanently deployed in each room (such as electrocardiography monitors and pulse oximeters) were considered to have no marginal cost, although any disposable supplies needed to use this equipment had a marginal cost and were included. Other equipment, such as mechanical ventilators, intravenous and tube feeding pumps, and special beds, were assigned a cost equal to what the hospital pays to rent these items. Items that do not have a hospital charge, such as laundry, electricity, and water were considered de mininis and not included as a marginal cost. Because we were interested in their stepdown costs, costs associated with care after transfer back to the ICU or in the operating room were not included. Had the patients been at an independent weaning facility, these events would have necessitated transfer back to the hospital. Costs were divided into 10 broad categories, as follows: Nurse labor: that which consisted of the cost of the registered nurse caring for the patient. Therapy: all labor and supplies by speech, occupational, physical, and enterostomal therapy. Imaging: all labor and material for electrocardiograms, radiography, electroencephalograms, nuclear medicine, and echocardiography. Respiratory: all respiratory therapy costs. Laboratory: all costs for laboratory samples, such as, blood, urine, sputum, and tissue. Blood Bank: all costs associated with blood products and transfusions. Central supply: all costs related to supplies that were not provided by another specific department. Dietary: all food supplements and tube feedings. Dialysis: labor and supplies for hemodialysis. Pharmacy: all drugs, creams, and medicines, including albumin and total parental nutrition supplied by the pharmacy. The Wilcoxon rank sum two-tailed test was used to compare groups.
Patients were cared for by their cardiac surgeon and an intensivist. Consultations with other physician specialties were obtained as needed. Physician charges and reimbursements were not included in the hospital cost.
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Comment |
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Although nursing labor costs were almost half the daily cost ($200 of $438.77), decreasing the staff-to-patient ratio may not save money if the lessened staff coverage slows ventilator weaning or increases mortality [8, 9]. Sensitivity analysis shows that cutting nursing staff in half (patient:nurse ratio, 4:1 during the day and 6:1 at night) to save $100 per day saves money only if the stepdown unit stay is prolonged by less than 23% and no complications such as pneumonia, pressure ulcers, or an increased mortality occur because of the decrease in staff.
It is difficult to compare these marginal costs with other costs in the literature, because of differences in accounting techniques. Accounting techniques differ because they have different purposes. We used marginal cost accounting because it answers the question, "How much money would I spend to treat this patient in my hospital at current staffing, bed, and equipment levels?" If the hospital were full and care of this patient delayed other surgeries or admissions, the cost of these delays or lost business would need to be included. However, the cardiac surgery service is constructed with enough flexibility that no cases were delayed or lost because of ventilator-dependent patients in the stepdown unit.
Various studies have looked at hospital charges and taken a fixed fraction of that and called it cost. However, Shwartz and colleagues based costs on relative value units and found that assuming a fixed ratio of cost to charge was not a good basis for ascertaining the cost on an individual basis [10]. In one study, the authors artificially and arbitrarily assigned more of the hospital’s overhead to the CVICU than to the stepdown unit and then claimed that early transfer saved thousands of dollars per patient [11]. Studies have looked at the total charge of caring for ICU patients requiring prolonged (> 3 days) mechanical ventilation and claimed that if that care is not provided, then that total charge would be saved [12]. However, these savings were artificial and the overhead was still incurred. Moving the patient from ICU to stepdown or treating one more or less patient does not affect fixed overhead costs. Using a cost accounting model that includes these fixed overhead costs will overestimate costs or savings. Savings are only realized if persons are not paid or supplies not purchased [13]. In practice, most of the claimed savings would not be achieved because the greatest part of the charge reflects overhead costs that would be incurred even if those patients are not cared for. These overhead costs include administrators’ salaries, hospital mortgage or bond repayments, and capitalized equipment. Fixed overhead costs may be as high as 84% of the hospital’s budget [13]. A more appropriate accounting system to determine savings or costs is based on the marginal cost of providing a service, "What does it cost us to provide care to one more (or one fewer) patient?" As long as operations on or other services to other patients are not postponed or canceled, these marginal costs represent the true cost to the hospital of weaning these patients. If, however, other operations are delayed because of bed occupancy, then the cost of caring for the delayed patient must be added to these marginal costs. Furthermore, if the number of ventilator-dependent patients increases sufficiently that new capital expenses (such as buying more monitors or building new rooms) are incurred by the hospital, then the cost would rise. However, the bed occupancy rate at this hospital and most hospitals is such that, combined with the low number of ventilator-dependent patients, operations would not be postponed or new capital outlays required.
Scheinhorn and colleagues [14] determined the cost of mechanical ventilation at home to be $405 per day, at extended care facilities $600 per day, and at a regional weaning center $980 per day. Sevick and coworkers [15] determined the average cost to be $246 per day if the home care was provided by a licensed practical nurse and $287 per day if provided by a registered nurse. They further estimated that hospital per diem costs for DRG 475 (respiratory system diagnosis with ventilator support) to be $1,353.28 [15]. Elpern and colleagues [16] supported the creation and use of a noninvasive respiratory care unit because costs were reduced by nearly $2,000 per patient per day—from $3,164 in the medical ICU to $1,188 in the noninvasive respiratory care unit. Although they did not define costs, the claimed cost savings are much greater than would be achieved merely by the difference in nursing staffing ratios between the two units. The difference in cost may primarily reflect a greater assessment to the ICU of the hospital’s overhead costs and not the cost of the care actually provided.
Currently, under DRG-based reimbursement (which provides a flat reimbursement to hospitals for the care of patients with respiratory failure and tracheostomies regardless of patient outcome), hospitals have a financial interest in transferring these patients as soon as they are medically stable to SNF. However, Section 4432(a) of the Balanced Budget Act of 1997 modifies how payment is made for Medicare patients at SNF. Formerly, SNF were paid on a reasonable cost payment system. Under the new law, payment rates are to cover all costs and are prospectively determined based on Resource Utilization Groups, Version III. SNF, which tend to run at full or near-full occupancy, can be choosy about which patients they accept. If ventilator-dependent patients (particularly those who are also getting hemodialysis) are perceived to be less profitable than other patients who require fewer resources, SNF may choose not to accept these patients, thus prolonging their hospital stays. The Balanced Budget Act may serve to keep these patients hospitalized. Locally we have seen the effects of that, as a number of SNF no longer accept ventilator-dependent patients.
Several studies have claimed hospital financial losses for ventilator-dependent patients [16, 17]. Elpern and colleagues [16] claimed a loss of $727 per day per Medicare patient. Gracey and coworkers [17] claimed a loss of more than $20,000 per patient. Again, these costs, which were not well-defined in the studies, probably include more than just direct variable costs, but include a portion of indirect and fixed costs.
A limitation of this study is that the small number of patients from only one service at one institution limits the generalizability of the study findings. Patients with other medical or surgical problems leading to ventilator dependency may have different costs and outcomes. Another limitation is the hospital’s billing and accounting system. Items that are used but not billed will underestimate patient cost. However, previous examination of the system by comparing the medical record to the billing record had shown that virtually all items and, in particular, the higher cost items were correctly captured.
Some might argue that it is incorrect to ignore overhead costs. If the hospital charged for or was reimbursed for all its services at only the direct variable cost, it would rather rapidly go bankrupt. This is tautologically true. The total of all reimbursements must include indirect and fixed overhead costs. However, much as an airline has several different fares for the same flight to try to fill as many seats as possible, hospitals may have several different reimbursements schemes to try to fill as many beds as possible—as long as the reimbursement is greater than the marginal cost. If, however, new equipment must be purchased or facilities built, these costs must be included.
In conclusion, ventilator-dependent patients can be inexpensively liberated from mechanical ventilation in a stepdown unit.
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