estimating cost at each stage of care mark smith, phd paul barnett, phd ciaran phibbs, phd herc...

Estimating Cost at Each Stage of CareEstimating Cost at Each Stage of Care

Mark Smith, PhDMark Smith, PhDPaul Barnett, PhDPaul Barnett, PhD

Ciaran Phibbs, PhDCiaran Phibbs, PhD

HERC CyberseminarHERC CyberseminarFebruary 28, 2007February 28, 2007

Health Economics Resource CenterHealth Economics Resource Center 33

OutlineOutline

1. Overview1. Overview

2. Decision Support System2. Decision Support System

3. HERC or DSS Costs?3. HERC or DSS Costs?

4.4. Fee Basis and Prosthetics DataFee Basis and Prosthetics Data

5.5. Examples and Q&AExamples and Q&A


Research on multiple care settingsResearch on multiple care settings

VA patients often receive care in many settings. This can be a challenge for cost research:

- Utilization records are split among several datasets.

- No single dataset has costs and procedures for all care.

Result: assessing cost across multiple settings often requires merging data from multiple sources.

So what?


Research on multiple care settingsResearch on multiple care settings

Different datasets have different cost variables- Include or exclude overhead (indirect) costs

- Differing methods to estimate costs

- Differing patterns of updating and validation

Assigning costs across the continuum of care requires familiarity with many datasets.


Representative patientsRepresentative patients

During this workshop we will describe several datasets:• Decision Support System datasets• HERC Average Cost datasets• National Prosthetic Patient Database• Fee Basis data

At the end we will consider two hypothetical patients and consider which databases we might use to assess the total cost of their care across multiple settings.

Introduction to Decision Support Introduction to Decision Support System (DSS) Cost DataSystem (DSS) Cost Data

Paul G. Barnett, PhDPaul G. Barnett, PhD


Cost assignment in Cost assignment in DSS Production SystemDSS Production System

Cost allocated to departmentsCost allocated to departments

– Cost of supplies, contractsCost of supplies, contracts

– Staff time allocations (data unique to DSS)Staff time allocations (data unique to DSS)


Cost assignment in Cost assignment in DSS Production SystemDSS Production System

Allocate costs to production units (ALB)

Distribute indirects and find unit cost of products (DCM)


DSS assigns costs to productsDSS assigns costs to products

Indirect (overhead) costs are distributed to Indirect (overhead) costs are distributed to patient care departmentspatient care departments

Intermediate products countedIntermediate products counted– All services and products in VISTA (VA All services and products in VISTA (VA

electronic medical records)electronic medical records)

Relative Value Units (RVUs) assigned to Relative Value Units (RVUs) assigned to products and totaledproducts and totaled– Cost per RVU used to find cost of each Cost per RVU used to find cost of each

intermediate productintermediate product


DSS Production SystemDSS Production System



Assign costs to encounters (DCR)


DSS National Data ExtractsDSS National Data Extracts

Production system not accessibleProduction system not accessible

National Data ExtractsNational Data Extracts– SAS files available at VA national SAS files available at VA national

computing center in Austin, TXcomputing center in Austin, TX– Web based report generator (VSSC web site)Web based report generator (VSSC web site)


DSS National Data ExtractsDSS National Data Extracts

Encounter-Level National Data Extracts

National ALBCC Extract



Assign costs to encounters (DCR)D

SS

Pro

d uc t

ion

Sys

tem


Department-level cost filesDepartment-level cost files

Account Level Budget Cost CenterAccount Level Budget Cost Center– Detail cost by cost centerDetail cost by cost center

– Useful to find personnel cost, overhead ratesUseful to find personnel cost, overhead rates


Encounter-level Encounter-level DSS Cost FilesDSS Cost Files

Inpatient filesInpatient files– Discharge file Discharge file

– Treating specialty (bed section) fileTreating specialty (bed section) file

Outpatient FilesOutpatient Files– Outpatient costOutpatient cost

– Low-cost outpatient visit fileLow-cost outpatient visit file

– Daily pharmacy costDaily pharmacy cost


Encounter-level cost detail filesEncounter-level cost detail files

Cost sub-totals Cost sub-totals

Prescription filePrescription file

Intermediate Product Department Files Intermediate Product Department Files

Lab, radiology extractsLab, radiology extracts


Advantages of DSSAdvantages of DSS

Reflects on-site review of staffing, costing, Reflects on-site review of staffing, costing, workload workload

Sums to actual VA costsSums to actual VA costsConsistent with utilization dataConsistent with utilization dataUseful to study VA efficiencyUseful to study VA efficiencyDoesn’t rely on assumptions based on Doesn’t rely on assumptions based on

coding or non-VA relative valuescoding or non-VA relative values


Improvement in DSS cost estimatesImprovement in DSS cost estimates

Better data on inpatient medical procedures Better data on inpatient medical procedures

Improvements via standardization, audit, Improvements via standardization, audit, and reviewand review

NDE filters out erroneous recordsNDE filters out erroneous records


HERC or DSS Cost DataHERC or DSS Cost DataHow Do They Compare?How Do They Compare?

Ciaran Phibbs, PhDCiaran Phibbs, PhD

Health Economics Resource CenterHealth Economics Resource Center

Quick Overview of HERC Quick Overview of HERC Average Cost EstimatesAverage Cost Estimates

Acute (med/surg) inpatient careAcute (med/surg) inpatient care– DRG weights with adjustments for length of DRG weights with adjustments for length of

stay and ICU daysstay and ICU days

– Scale to actual VA costs by category of careScale to actual VA costs by category of care

Other inpatient careOther inpatient care– Per diem costs, by category of carePer diem costs, by category of care


Quick Overview of HERC Quick Overview of HERC Average Cost Estimates, ContinuedAverage Cost Estimates, Continued

Outpatient careOutpatient care– Assign private sector (mostly Medicare) Assign private sector (mostly Medicare)

RVUs to VA CPT codesRVUs to VA CPT codes

– Scale to actual VA costs by category of careScale to actual VA costs by category of care

Category costs from CDR FY 98-03Category costs from CDR FY 98-03

Category costs summaries of DSS since Category costs summaries of DSS since FY 04FY 04


Implications, DSS vs. CDRImplications, DSS vs. CDR

98-03, CDR assigned more costs to 98-03, CDR assigned more costs to inpatient care, and less to outpatient care inpatient care, and less to outpatient care than DSSthan DSS

For 98-03, need to be careful about mixing For 98-03, need to be careful about mixing HERC and DSS cost estimates. HERC and DSS cost estimates.

e.g. use DSS for outpatient care and e.g. use DSS for outpatient care and HERC for inpatient care would over-HERC for inpatient care would over-estimate costsestimate costs


See Guidebooks for Full Details See Guidebooks for Full Details About the HERC Average Cost DataAbout the HERC Average Cost Data

HERC web siteHERC web site– www.herc.research.va.gov/publicationswww.herc.research.va.gov/publications

– Separate guidebooks for inpatient, Separate guidebooks for inpatient, outpatient, and person-level data.outpatient, and person-level data.

– Additional information about these data in Additional information about these data in Technical Reports. Technical Reports.


HERC vs. DSSHERC vs. DSSPerson-Level Costs Person-Level Costs

Person-level (per year) costs are similarPerson-level (per year) costs are similar– Overall correlation = 0.72Overall correlation = 0.72

– Inpatient acute med/surg correlation = 0.66Inpatient acute med/surg correlation = 0.66

– Other inpatient care correlation = 0.77Other inpatient care correlation = 0.77

– Outpatient care correlation = 0.51 Outpatient care correlation = 0.51


HERC vs. DSSHERC vs. DSSOutpatient Encounter Costs Outpatient Encounter Costs

At the encounter level, overall correlation At the encounter level, overall correlation between HERC and DSS only 0.26between HERC and DSS only 0.26

If trim the top and bottom 1% relative If trim the top and bottom 1% relative outliers, the correlation increases to 0.72 outliers, the correlation increases to 0.72


Differences Between HERC & DSSDifferences Between HERC & DSSOutpatient Encounter Costs Outpatient Encounter Costs

Surgery more likely to have much higher Surgery more likely to have much higher DSS costsDSS costs

Categories with many low cost items, such Categories with many low cost items, such as labs, are much more likely to have as labs, are much more likely to have large relative differenceslarge relative differences


How to Choose HERC vs. DSS CostsHow to Choose HERC vs. DSS Costs

Study design is the most important considerationStudy design is the most important consideration

HERC costs are based on non-VA weights or RVUs. HERC costs are based on non-VA weights or RVUs.

DSS designed to capture actual VA production costsDSS designed to capture actual VA production costs

Examine the costs that are important to your studyExamine the costs that are important to your study


When not to use HERC When not to use HERC AC Outpatient datasetAC Outpatient dataset

If your study will have systematic differences on If your study will have systematic differences on within CPT code resource use.within CPT code resource use.– Example, add a brief smoking counseling Example, add a brief smoking counseling

component to physician visitcomponent to physician visit

Study focuses on CPT codes that HERC used Study focuses on CPT codes that HERC used imputed values for.imputed values for.

Using local cost estimates, and they don’t seem Using local cost estimates, and they don’t seem correct. There could be errors in the CDR correct. There could be errors in the CDR allocations that HERC relies on.allocations that HERC relies on.

The Fee Basis (FEE) filesThe Fee Basis (FEE) files

Mark W. Smith, PhDMark W. Smith, PhD


Overview of Fee Basis ProgramOverview of Fee Basis Program

Pays for care at Pays for care at non-VA facilitiesnon-VA facilities in three in three situations:situations:– VA cannot provide the care locallyVA cannot provide the care locally– It is economical to do soIt is economical to do so– Travel to a VA facility is medically infeasibleTravel to a VA facility is medically infeasible


Overview of Fee Basis ProgramOverview of Fee Basis Program

Some common uses:Some common uses:

Community nursing home careCommunity nursing home care

Home-based care Home-based care – E.g.: long-term oxygen therapyE.g.: long-term oxygen therapy

Compensation & pension examsCompensation & pension exams


Overview of Fee Basis files Overview of Fee Basis files

Subset of all VA contract careSubset of all VA contract care

– Most “sharing agreement” care from affiliate universities Most “sharing agreement” care from affiliate universities is is notnot included included

– Substantial non-VA utilization unaccounted forSubstantial non-VA utilization unaccounted for


What Data Rows RepresentWhat Data Rows Represent

Outpatient: a single service provided, reflected Outpatient: a single service provided, reflected in the CPT procedure codein the CPT procedure code

Inpatient: all days of stay within the invoice Inpatient: all days of stay within the invoice period (typically a calendar month). period (typically a calendar month).

A single inpatient stay may be billed in A single inpatient stay may be billed in multiple invoices and hence multiple Fee Basis multiple invoices and hence multiple Fee Basis records for the patient.records for the patient.


Highlights of Patient DataHighlights of Patient Data

Scrambled SSN (SCRSSN)Scrambled SSN (SCRSSN)

Primary Service Area (PSA)Primary Service Area (PSA)– 3-digit VA station number3-digit VA station number

Can be linked by SCRSSN to other VA Can be linked by SCRSSN to other VA databases to find other patient-level variablesdatabases to find other patient-level variables


Highlights of Clinical DataHighlights of Clinical Data

Outpatient: Outpatient: – Date of serviceDate of service– 1 CPT procedure code1 CPT procedure code

Inpatient:Inpatient:– Start and end dates of invoice period Start and end dates of invoice period – Up to 5 surgery codesUp to 5 surgery codes– Up to 5 ICD-9 diagnosis codesUp to 5 ICD-9 diagnosis codes


Highlights of Financial DataHighlights of Financial Data

Amount claimed by vendorAmount claimed by vendor

Amount paid Amount paid

Medicare prospective payment amount (inpatient) Medicare prospective payment amount (inpatient)


Highlights of Vendor DataHighlights of Vendor Data

Vendor IDVendor ID

Address (city, state, zip)Address (city, state, zip)

Related VA station numberRelated VA station number


Creating Discharge Records (1)Creating Discharge Records (1)

Goal: Create a single discharge record from Goal: Create a single discharge record from multiple inpatient service (INPT) recordsmultiple inpatient service (INPT) records

Method: Concatenate by SCRSSN using Method: Concatenate by SCRSSN using TREATDTF and TREATDTOTREATDTF and TREATDTO

Use VENDID to find a transfer from one Use VENDID to find a transfer from one provider to anotherprovider to another


Creating Discharge Records (2)Creating Discharge Records (2)

Records are typically processed within 30 days of Records are typically processed within 30 days of invoicing.invoicing.

BUTBUT

Invoices may be sent LONG after services are Invoices may be sent LONG after services are rendered.rendered.

THEREFORETHEREFORE

To find all services in a fiscal year, look in the Fee To find all services in a fiscal year, look in the Fee Basis files in that year Basis files in that year andand the 2 following years. the 2 following years.


Overlap with Other VA FilesOverlap with Other VA Files

Community nursing home care also inCommunity nursing home care also in– DSS outpatient filesDSS outpatient files– PTF Extended Care filesPTF Extended Care files

Most completed hospital stays also in PTF Most completed hospital stays also in PTF Non-VA Hospitalization filesNon-VA Hospitalization files

National Prosthetic Patient Database National Prosthetic Patient Database


NPPD CreationNPPD Creation

“Prosthetics Package” in VISTA records all orders for prosthetic items and services that are channeled through the Prosthetics and Sensory Aids Service (PSAS).


NPPD StructureNPPD Structure

Each record represents a single prosthetic device or service ordered.– Multi-part items (e.g., wheelchairs) have a separate record

for each element, but often a single overall price.

NPPD is an order database, not a use database. One cannot tell… – whether a patient picked up an ordered item – for how long it was used (if ever)– whether it was returned


NPPD CostsNPPD Costs

Costs for new items represent the local/regional/national contract cost.

Costs for repaired items represent 50% of the local contract cost or the actual repair cost, whichever is less.

Labor and overhead costs do not appear in NPPD.

All NPPD costs are represented in other cost datasets already (e.g., within variable supply cost or indirect cost in DSS)


NPPD UsesNPPD Uses

Reasonable uses of NPPD– Comparing costs for particular items or services across

stations or VISNs

– Studying changes over time in prescribing practices for particular types of items, such as wheelchairs

Inadvisable use of NPPD– Locating prosthetics orders or cost for particular

individuals


HERC Technical ReportsHERC Technical Reports

Fee Basis data: report completedFee Basis data: report completed

NPPD: report in progressNPPD: report in progress

URL: http://www.herc.research.med.va.gov/publica URL: http://www.herc.research.med.va.gov/publica

tions/technical_reports.asptions/technical_reports.asp

Using Multiple Datasets: Using Multiple Datasets: ExamplesExamples


A typical patient: JoeA typical patient: Joe

Joe is a 42 y.o. homeless veteran with PTSD and comorbid depression.

He enters a domiciliary for 30 days. After discharge he receives prescription medications. He stops taking them and his depression becomes severe. He is taken to the VA emergency room and then transferred to an inpatient mental health bedsection. After discharge he receives monthly telehealth contacts and returns to VA for a PTSD therapy group.


Cost of Joe’s CareCost of Joe’s Care

1. Domiciliary

- Utilization: PTF, DSS NDE

- Cost: HERC AC, DSS NDE

HERC data based on average cost per day; DSS allows more variation.

Little difference in practice: domiciliary care is unlikely to vary much in cost day to day



2. Outpatient prescription medications

- Utilization:

PBM V3.0 Database (“PBM”)

DSS Pharmacy NDE (“DSS Pharmacy Extract”)

DSS NDE for outpatient care: daily summary, not

at the prescription level



2. Outpatient prescription medications, cont’d

- Cost

PBM has purchase price (only) for each script

DSS NDE for outpatient care has daily total cost for the “pharmacy clinic” – rolls up all scripts per day

DSS Pharmacy Extract has many cost variables for each prescription: fixed direct, variable direct, indirect, variable supply



3. VA emergency room care

Utilization: Cost:

- DSS NDEs - DSS NDEs

- PTF, OPC - HERC AC



3. VA emergency room care

ER care can vary substantially in cost. Thus, DSS will be a better option than the HERC AC data.

HERC data may be accurate on average but will most likely understate the variance substantially.



4. Inpatient mental health bedsection

Utilization Cost

DSS NDEs DSS NDEs

PTF HERC AC



4. Inpatient mental health bedsection, cont’d

CostDSS NDE will have most precise costs. HERC AC may be fine if the patient didn’t have surgery, since surgery produces much of the cost variation.

If you use DSS for one aspects of care, use it for all aspects unless you have a strong justification for doing otherwise!


Cost of Joe’s Care Cost of Joe’s Care

5. Telehealth

Utilization CostOPC HERC ACDSS NDE DSS NDE

Be sure to validate! Consider using self-report or provider report if datasets are inaccurate.

Note: DSS lacked telehealth before FY2003.



6. PTSD Group Therapy

Utilization CostOPC HERC ACDSS NDE DSS NDE

Either option is reasonble; there is likely to be little variation in cost across therapy sessions.



Summary - 1

DSS NDEs, including the Pharmacy Extract, can be used for all of Joe’s care.

OPC/PTF, combined with HERC AC data, can also be used for all of Joe’s care.



Summary - 2

DSS better captures variation in inpatient care.

but

HERC data include estimated Medicare payments (“HERC Values”). HERC data use Medicare RVUs and thus may have greater external validity.


Typical patient: Evelyn Typical patient: Evelyn

Evelyn is a 75 y.o. veteran with osteoporosis and emphysema who lives at home.

Non-VA care: orthopedist, community nursing home

VA care: - pulmonologist and primary care physician- outpatient prescriptions through CMOP- inpatient med/surg care - physical therapy - walker - long-term oxygen therapy


Cost of Evelyn’s Care Cost of Evelyn’s Care

1. Non-VA orthopedist

Utilization CostMedicare Medicare Self-report Medicare; HERC AC; self-

report; Fee Basis

Medicare data available from VIREC with 2-year lag.Self-report acceptable for short horizons. Best to

validate if possible.



2. Community nursing home

Utilization Cost

a. If paid by VA…Fee Basis Fee Basis DSS outpatient NDE DSS outpatient NDE

b. If paid by another source… Self-report Medicare; Fee Basis;

DSS



3. VA inpatient med/surg 4. Outpatient pulmonologist, PCP, physical therapy

Utilization CostDSS NDE DSS NDEPTF/OPC HERC AC

DSS preferable for inpatient, both acceptable for outpatient. (Use DSS for all – best not to mix DSS and HERC data.)



5. VA prescription medications

Utilization Cost

DSS Pharmacy NDE DSS Pharmacy NDE

PBM PBM (direct cost only)



6. Walker

Utilization Costno good source NPPD *

* NPPD costs are reflected in HERC and DSS outpatient data, so do not double-count. Use NPPD costs only to estimate direct costs of devices or services.



7. Long-term oxygen therapy

Utilization CostNPPD NPPD *

* NPPD costs are reflected in HERC and DSS outpatient data, so do not double-count. Use NPPD costs only to estimate direct costs of devices or services.


Questions?

[email protected]

estimating cost at each stage of care mark smith, phd paul barnett, phd ciaran phibbs, phd herc...

Documents

cost research

estimating cost

cost centeruseful

personnel cost

total cost

dss cost datahow

dss cost estimatesbetter

dss costs