CADTH Guidance Document for the Costing Process – 2nd edition

CADTH SYMPOSIUMANTHONY BUDDEN

13 APRIL 2015SASKATOON, SK

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Research Team

• Philip Jacobs, IHE• Karen Lee, CADTH

Acknowledgements

• Researchers at CIHI• Peer review from health economic/health services

researchers

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CADTH Cost Guidance document

• Published in 1996• Useful resource for

researchers• Provides guidance on:

o determining, measuring and valuing costs and resources for economic evaluations

o Information sourceso Reporting formats

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Purpose of update to Cost Guidance document

• Evolution of cost information• Provide researchers with description of different costing

approaches• Encourage increased uniformity and transparency in costing

methods and information• Highlight key sources of information

NOT• To duplicate information available elsewhere• Canadian costing manual (Comprehensive list of sources)• Definitive hierarchy of sources

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Approach to update

• Collaboration between CADTH and IHE• Working closely with researchers (CIHI, peer reviewers)• Identifying new areas and need for revisions since 1996

o Literature review of economic evaluations in Canadao Scan of cost sources in Canadao Discussion with researchers in various cost fields in Canadao CDR experience

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Key changes

• Structure of the document• Costing categories and content• Inclusion of examples• More information in areas where developments have

occurred (hospital costing)

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Perspective

• Based on the decision problem• Perspective will

o Determine the types of costs to considero Which data sources to use

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Measurement and resource valuation – key sections for discussion• Pharmaceuticals (Prescription/ OTC drugs, Drug delivery

devices/ monitoring tools, Drug administration)• Physician Services• Hospital Services (Inpatient services/ Outpatient

services)• Diagnostic and Investigational Services (Radiology,

Laboratory tests and assays, Medical devices)• Non-Physician Professional Services (physio, nursing)• Community Based Services (Residential care, Home

care, Ambulance services)• Other Information (personal and societal cost information

and public health services)

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Hospital services

• Greater amount of information available• Hospital services refer to services produced within a

hospital on an inpatient or outpatient basis, and include nursing and other professional services, lab and diagnostic services, as well as dispensing and administration of drugs, housekeeping and nutritiono Physician services typically paid and costed separately

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Hospital services – inpatient careInpatient hospital care:

Levels of costing

Per diem

costing

Case mix costing (basic CMG+ and refined CMG+)

Patient costing on a case by case basis

Simplistic

In depth

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Inpatient care – per diem costing

Per diem

costing• Simplistic approach• Cost per inpatient day x hospital LOS • Uniform cost for inpatient day

• Data sources:o Expected LOS for cases can be obtained from the CIHI discharge

abstract database (DAD)

o Cost per day obtained from CIHI

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Inpatient care – case mix costing

Case mix costing (basic CMG+ and refined CMG+)

• CIHI collects inpatient discharge data from hospitals across the country on a common discharge abstract

• Data captured include:o Patient ageo Sexo Diagnoses (ICD-10-CA)o Intervention/s

• Reports collated by CIHI in the DAD

o Type of diagnosis (system of ranking)

o MRDx identifies diagnosis responsible for longest portion of stay

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Inpatient care – case mix costing

• Important concepts in case mix costing:

Concept Brief description

Case Mix Group (CMG) Similar cases grouped to determine average cost of case

Resource Intensity Weight (RIW)

Standardised estimate of expected resource use

Cost of a standard hospital stay (CSHS; formerly CPWC)

Inpatient costs for unit (hospital or province) are summed and divided by summed RIW for all cases

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Inpatient care – case mix costing

• 528 CMGs • RIWs are produced for each CMG• The average case value = 1.00• RIW values for each CMG are subdivided by age and case

type (typical/atypical)

• Base CMG+: cases measured unadjusted for comorbidities or additional comorbidities

• Refined CMG+: includes base values adjusted for comorbidities and additional interventions

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Inpatient care – case mix costing• Data sources:

o RIWs obtained from CIHI DAD

o CSHS obtained from CIHI Canadian MIS Database

• Other data sources – case mix based on pt cost estimates:o Alberta: IHDA, Ontario: OCCI

• Reported information differs• Example: From a government payer perspective, a

researcher in Ontario wants to estimate the hospital cost of a unilateral knee replacement for a 50 y.o.:o Base RIW & weighted average unadjusted CSHS for Ontario in

2012 (latest), cost is $7,978.

o IHDA, relevant year (2012/13), desired measure, and all cases; cost is $10,263. Includes atypical patients, hence the higher cost

o Phys fees/ rehab costs not included

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Inpatient care – patient level costing

Patient costing on a case by case basis

• Patient costing on a case by case basis are generated from CIHIs CMDB

• Only available for certain hospitals within 4 provinces: Alberta, Ontario, BC and Nova Scotia.

• They may be directly obtained from provincial health departments

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Inpatient care – costing summary

Approach Strengths WeaknessesApplying a per diem cost to length of stay

Provides a consistent measure over a historical period

Does not distinguish between (higher cost) early days and later days of a stayDoes not address differences in resource use between different types of cases

Case mix Addresses differences in resource use between different types of cases

Does not capture historical differences in resource use per caseRIWs are hot hospital specific; based on data for a small number of hospitals

Person level Allows for more precise comparison between identified cases within a single diagnostic group

Limited availability of data

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Outpatient (ambulatory) care

• Non-admitted patient hospital visits which include diagnostic services, clinic care, outpatient surgery and ED visits

• Information captured within NACRS (overseen by CIHI) which feeds into CIHI’s CACS for outpatient care

• Note: Small number of hospitals in BC, ON, AB collect costs• CIHI have estimates RIWs for CACS groups• Care often includes physician intervention or consultation

(counted separately from hospital facility component)• Provincial outpatient data for Alberta and Ontario is made

available on their patient cost tools: the IHDA and OCCI respectively

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Community services – residential care

RAI-MDS 2.0

RUG(currently

RUG-III)

Data collected from residents on cognition, disability and care received

• Residential care is the joint provision of longer term accommodation and health care services in a facility

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Residential care – RUGS

• Each RUG-III group is also assigned a Case Mix Index (CMI) that provides indication of average daily resource use for individuals in a particular group (available from CIHI)

• Data are summarised into quarterly RUG Weighted Patient Days (RWPD) reports which are available to certain Long-Term Care homes and facilities through CIHI’s eReporting portal, which is not currently accessible to the public

• Unit costs per RUG-III group are publicly available through Ontario’s Health System Performance Research Network – paper by Wodchis et al. 2013

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Home care & ambulance services

• All provinces provide professional home care, but cost and utilization data are not easily obtainable

• Ontario’s HSPRN paper (Wodchis et al. 2013) estimated fees paid to professional home care visitors for a wide range of services by the government in Ontario

• Cost or fee directly obtained from province is suggested more appropriate

• The full cost of ambulance services throughout Canada is not well reported

• Full costs may be obtained from provincial or local ambulance services such as the Toronto EMS annual report

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Challenges

• Common terminology/language• Lack of publicly available information (e.g. RUGS,

Ambulance services)• Jurisdiction variation (e.g. pharmaceuticals, physician) • Lack of agreement over accepted/appropriate methods (e.g.

indirect costs)• Difficult to have overarching guidance in some cases• Requirement for further research, greater public access to

information

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Next Steps

• Finalize document: April 2015• Stakeholder feedback: May 2015• Posting of final document: Summer 2015

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