Changes in hospital service demand, cost, and patient illness severity following health reform.

OBJECTIVE: To estimate the effects of the health insurance exchange and Medicaid coverage expansions on hospital inpatient and emergency department (ED) utilization rates, cost, and patient illness severity, and also to test the association between changes in outcomes and the size of the uninsured population eligible for coverage in states. DATA SOURCES: Healthcare Cost and Utilization Project State Inpatient and Emergency Department Databases, 2011-2015, Nielsen Demographic Data, and the American Community Survey. STUDY DESIGN: Retrospective study using fixed-effects regression to estimate the effects in expansion and nonexpansion states by age/sex demographic groups. FINDINGS: In Medicaid expansion states, rates of uninsured inpatient discharges and ED visits fell sharply in many demographic groups. For example, uninsured inpatient discharge rates across groups, except young females, decreased by ≥39 percent per capita on average in expansion states. In nonexpansion states, uninsured utilization rates remained unchanged or increased slightly (0-9.2 percent). Changes in all-payer and private insurance rates were more muted. Changes in inpatient costs per discharge were negative, and all-payer inpatient costs per discharge declined <6 percent in most age/sex groups. The size of the uninsured population eligible for coverage was strongly associated with changes in outcomes. For example, among males aged 35-54 years in expansion states, there was a 0.793 percent decrease in the uninsured discharge rate per unit increase in the coverage expansion ratio (the ratio of the size of the population eligible for coverage to the size of the previously covered population within an age/sex/payer/geographic group). CONCLUSIONS: Significant shifts in cost per discharge and patient severity were consistent with selective take-up of insurance. The "treatment intensity" of expansions may be useful for anticipating future effects.

The Effects of Medicare Accountable Organizations on Inpatient Mortality Rates.

Studies have linked Accountable Care Organizations (ACOs) to improved primary care, but there is little research on how ACOs affect care in other settings. We examined whether Medicare ACOs have improved hospital quality of care, specifically focusing on preventable inpatient mortality. We used 2008-2014 Healthcare Cost and Utilization Project hospital discharge data from 34 states' Medicare ACO and non-ACO hospitals in conjunction with data from the American Hospital Association Annual Survey and the Survey of Care Systems and Payment. We estimated discharge-level logistic regression models that measured the relationship between ACO affiliation and mortality following admissions for acute myocardial infarction, abdominal aortic aneurysm (AAA) repair, coronary artery bypass grafting, and pneumonia, controlling for patient demographic mix, hospital, and year. Our results suggest that, on average, Medicare ACO hospitals are not associated with improved mortality rates for the studied IQI conditions. Stakeholders may potentially consider providing ACOs with incentives or designing new programs for ACOs to target inpatient mortality reductions.

Medicare Advantage Penetration and Hospital Costs Before and After the Affordable Care Act.

BACKGROUND: Research has suggested that growth in the Medicare Advantage (MA) program indirectly benefits the entire 65+-year-old population by reducing overall expenditures and creating spillover effects of patient care practices. Medicare programs and innovations initiated by the Affordable Care Act (ACA) have encouraged practices to adopt models applying to all patient populations, which may influence the continued benefits of MA program growth. OBJECTIVE: This study investigated the relationship between MA program growth and inpatient hospital costs and utilization before and after the ACA. METHODS: Primary data sources were 2005-2014 Health Care Cost and Utilization Project hospital data and 2004-2013 Centers for Medicare & Medicaid Services enrollment data. County-year-level regression analysis with fixed effects examined the relationship between Medicare managed care penetration and hospital cost per enrollee. We decomposed results into changes in utilization, severity, and severity-adjusted inpatient resource use. Analyses were stratified by whether the admission was urgent or nonurgent. PRINCIPAL FINDINGS: A 10% increase in MA penetration was associated with a 3-percentage point decrease in inpatient cost per Medicare enrollee before the ACA. This effect was more prominent in nonurgent admissions and diminished after the ACA. CONCLUSIONS: Results suggest that MA enrollment growth is associated with diminished spillover reductions in hospital admission costs after the ACA. We did not observe a strong relationship between MA enrollment and inpatient days per enrollee. Future research should examine whether spillover effects still are observed in outpatient settings.

Changes in Hospital Inpatient Utilization Following Health Care Reform.

OBJECTIVE: To estimate the effects of 2014 Medicaid expansions on inpatient outcomes. DATA SOURCES: Health Care Cost and Utilization Project State Inpatient Databases, 2011-2014; population and unemployment estimates. STUDY DESIGN: Retrospective study estimating effects of Medicaid expansions using difference-in-differences regression. Outcomes included total admissions, referral-sensitive surgical and preventable admissions, length of stay, cost, and patient illness severity. FINDINGS: In 2014 quarter four, compared with nonexpansion states, Medicaid admissions increased (28.5 percent, p = .006), and uninsured and private admissions decreased (-55.1 percent, p = .001, and -6.6 percent, p = .052), whereas all-payer admissions showed little change. Uninsured expansion effects were negative for preventable admissions (-24.4 percent, p = .068), length of stay (-9.3 percent, p = .039), total cost (-9.2 percent, p = .128), and illness severity (-4.5 percent, p = .397). Significant positive expansion effects were found for Medicaid referral-sensitive surgeries (11.8 percent, p = .021) and patient illness severity (2.3 percent, p = .015). Private and all-payer expansion effects for outcomes other than admission volume were small and mainly nonsignificant (p > .05). CONCLUSION: Medicaid expansions did not change all-payer admission volumes, but they were associated with increased Medicaid and decreased uninsured volumes. Results suggest those previously uninsured with greater needs for inpatient services were most likely to gain coverage. Compositional changes in uninsured and Medicaid admissions may be due to selection.

Characteristics of High- and Low-Efficiency Hospitals.

We compared performance, operating characteristics, and market environments of low- and high-efficiency hospitals in the 37 states that supplied inpatient data to the Healthcare Cost and Utilization Project from 2006 to 2010. Hospital cost-inefficiency estimates using stochastic frontier analysis were generated. Hospitals were then grouped into the 100 most- and 100 least-efficient hospitals for subsequent analysis. Compared with the least efficient hospitals, high-efficiency hospitals tended to have lower average costs, higher labor productivity, and higher profit margins. The most efficient hospitals tended to be nonteaching, investor-owned, and members of multihospital systems. Hospitals in the high-efficiency group were located in areas with lower health maintenance organization penetration and less competition, and they had a higher share of Medicaid and Medicare admissions. Results of the analysis suggest there are opportunities for public policies to support improved efficiency in the hospital sector.

Medicare Advantage and Traditional Medicare Hospitalization Intensity and Readmissions.

Medicare Advantage plans have incentives and tools to optimize patient care. Therefore, Medicare Advantage hospitalizations may have lower cost and higher quality than similar traditional Medicare hospitalizations. We applied a coarsened matching approach to 2013 Healthcare Cost and Utilization Project hospital discharge data from 22 states to compare hospital cost, length of stay, and readmissions for Traditional Medicare and Medicare Advantage. We found that Medicare Advantage hospitalizations were substantially less expensive and shorter for mental health stays but costlier and longer for injury and surgical stays. We found little difference in the cost and length of medical stays and in readmission rates. One explanation is that Medicare Advantage plans use outpatient settings for many patients with behavioral health conditions and for injury and surgical patients with less complex health needs. Alternatively, the observed differences in behavioral health cost and length of stay may represent skimping on appropriate care.

Impact of Health System Affiliation on Hospital Resource Use Intensity and Quality of Care.

OBJECTIVE: To assess the impact of hospital affiliation, centralization, and managed care plan ownership on inpatient cost and quality. DATA SOURCES: Inpatient discharges from 3,957 community hospitals in 44 states and American Hospital Association Annual Survey data from 2010 to 2012. STUDY DESIGN: We conducted a retrospective longitudinal regression analysis using hierarchical modeling of discharges clustered within hospitals. DATA COLLECTION: Detailed discharge data including costs, length of stay, and patient characteristics from the Healthcare Cost and Utilization Project State Inpatient Databases were merged with hospital survey data from the American Hospital Association. PRINCIPAL FINDINGS: Hospitals affiliated with health systems had a higher cost per discharge and better quality of care compared with independent hospitals. Centralized systems in particular had the highest cost per discharge and longest stays. Independent hospitals with managed care plans had a higher cost per discharge and better quality of care compared with other independent hospitals. CONCLUSIONS: Increasing prevalence of health systems and hospital managed care ownership may lead to higher quality but are unlikely to reduce hospital discharge costs. Encouraging participation in innovative payment and delivery reform models, such as accountable care organizations, may be more powerful options.

Discharge Planning and Hospital Readmissions.

This study examines the association between the quality of hospital discharge planning and all-cause 30-day readmissions and same-hospital readmissions. The sample included adults aged 18 years and older hospitalized in 16 states in 2010 or 2011 for acute myocardial infarction, heart failure, pneumonia, or total hip or joint arthroplasty. Data from the Hospital Consumer Assessment of Healthcare Providers and Systems measured discharge-planning quality at the hospital level. A generalized linear mixed model was used to estimate the contribution of patient and hospital characteristics to 30-day all-cause and same-hospital readmissions. Discharge-planning quality was associated with (a) lower rates of 30-day hospital readmissions and (b) higher rates of same-hospital readmissions for heart failure, pneumonia, and total hip or joint replacement. These results suggest that by improving inpatient discharge planning, hospitals may be able to influence their 30-day readmissions and increase the likelihood that readmissions will be to the same hospital.

Predicting inpatient hospital payments in the United States: a retrospective analysis.

BACKGROUND: The Affordable Care Act (ACA) has increased rates of public and private health insurance in the United States. Increasing coverage could raise hospital revenue and reduce the need to shift costs to insured patients. The consequences of ACA on hospital revenues could be examined if payments were known for most hospitals in the United States. Actual payment data are considered confidential, however, and only charges are widely available. Payment-to-charge ratios (PCRs), which convert hospital charges to an estimated payment, have been estimated for hospitals in 10 states. Here we evaluated whether PCRs can be predicted for hospitals in states that do not provide detailed financial data. METHODS: We predicted PCRs for 5 payer categories for over 1,000 community hospitals in 10 states as a function of state, market, hospital, and patient characteristics. Data sources included the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases, HCUP Hospital Market Structure file, Medicare Provider of Service file, and state information from several sources. We performed out-of-sample prediction to determine the magnitude of prediction errors by payer category. RESULTS: Many individual, hospital, and state factors were significant predictors of PCRs. Root mean squared error of prediction ranged from 32 to over 100 % of the mean and varied considerably by which states were included or predicted. The cost-to-charge ratio (CCR) was highly correlated with PCRs for Medicare, Medicaid, and private insurance but not for self-pay or other insurance categories. CONCLUSIONS: Inpatient payments can be estimated with modest accuracy for community hospital stays funded by Medicare, Medicaid, and private insurance. They improve upon CCRs by allowing separate estimation by payer type. PCRs are currently the only approach to estimating fee-for-service payments for privately insured stays, which represent a sizable proportion of stays for individuals under age 65. Additional research is needed to improve the predictive accuracy of the models for all payers.

Patient factors contributing to variation in same-hospital readmission rate.

The Centers for Medicare & Medicaid Services Hospital Readmission Reduction Program and the Centers for Medicare & Medicaid Innovations Bundled Payments for Care Improvement Initiative hold hospitals accountable for readmissions that occur at other hospitals. A few studies have described the extent to which hospital readmissions occur at the original place of treatment (i.e., same-hospital readmissions). This study uses data from 16 states to describe variation in same-hospital readmissions by patient characteristics across multiple conditions. We found that the majority of 30-day readmissions occur at the same hospital, although rates varied considerably by condition. A significant number of hospitals had very low rates of same-hospital readmissions, meaning that the majority of their readmissions went to other hospitals. Future research should examine why some hospitals are able to retain patients for a same-hospital readmission and others are not.

The Relationship between Local Economic Conditions and Acute Myocardial Infarction Hospital Utilization by Adults and Seniors in the United States, 1995-2011.

OBJECTIVE: To assess the association between aggregate unemployment and hospital discharges for acute myocardial infarction (AMI) among adults and seniors, 1995-2011. DATA SOURCES/STUDY SETTING: Community hospital discharge data from states collected for the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID) and economic data from the Bureau of Labor Statistics, 1995-2011. STUDY DESIGN: Quarterly time series study of unemployment and aggregate hospital discharges in local areas using fixed effects to control for differences between local areas. DATA COLLECTION/EXTRACTION METHODS: Secondary data on inpatient stays and unemployment rates aggregated to micropolitan and metropolitan areas. PRINCIPAL FINDINGS: For both adults and seniors, a 1 percentage point increase in the contemporaneous unemployment rate was associated with a statistically significant 0.80 percent (adults) to 0.96 percent (seniors) decline in AMI hospitalization during the first half of the study but was unrelated to the economic cycle in the second half of the study period. CONCLUSIONS: The study found evidence that the aggregate relationship between health and the economy may be shifting for cardiovascular events, paralleling recent research that has shown a similar shift for some types of mortality (Ruhm 2013), self-reported health, and inpatient use among seniors (McInerney and Mellor 2012).

Variation in hospital inpatient prices across small geographic areas.

OBJECTIVES: To examine whether market competition may influence the difference in the inpatient price per discharge between public (Medicare) and private payers across small geographic areas. STUDY DESIGN: Retrospective multivariate analysis. METHODS: Data came from the 2006 Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SIDs) in 162 counties from 6 states where an HCUP price-to-charge ratio (PCR) was available. The SIDs were linked with the Area Resource File, American Hospital Association Annual Survey Database, and US Census Bureau data files. Hospital inpatient prices were estimated by applying the HCUP PCR to total hospital charges. Payer-specific price comparisons were made for all discharges, an acute condition (acute myocardial infarction), and an elective condition (knee arthroplasty). Ordinary least squares models were used to examine the effect of market competition on the inpatient price per discharge by payer. RESULTS: Greater geographic variation was found in the inpatient price per discharge among private than public payers for most hospital services. Hospitals in more concentrated markets were associated with a higher price per discharge among knee arthroplasty discharges for both payers. CONCLUSIONS: Hospitals charged significantly higher prices to private than public payers. Because the payment policies from Medicare ultimately affect private payers, public policy efforts that take into consideration market-based approaches or payment reform may help to reduce price variations.

Geographic variation in cesarean delivery in the United States by payer.

BACKGROUND: The rate of cesarean delivery in the United States is variable across geographic areas. The aims of this study are two-fold: (1) to determine whether the geographic variation in cesarean delivery rate is consistent for private insurance and Medicaid (2) to identify the patient, population, and market factors associated with cesarean rate and determine if these factors vary by payer. METHODS: We used the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID) to measure the cesarean rate at the Core-Based Statistical Area (CBSA) level. We linked the hospitalization data to data from other national sources to measure population and market characteristics. We calculated unadjusted and risk-adjusted CBSA cesarean rates by payer. For the second aim, we estimated a hierarchical logistical model with the hospitalization as the unit of analysis to determine the factors associated with cesarean delivery. RESULTS: The average CBSA cesarean rate for women with private insurance was higher (18.9 percent) than for women with Medicaid (16.4 percent). The factors predicting cesarean rate were largely consistent across payers, with the following exceptions: women under age 18 had a greater likelihood of cesarean section if they had Medicaid but had a greater likelihood of vaginal birth if they had private insurance; Asian and Native American women with private insurance had a greater likelihood of cesarean section but Asian and Native American women with Medicaid had a greater likelihood of vaginal birth. The percent African American in the population predicted increased cesarean rates for private insurance only; the number of acute care beds per capita predicted increased cesarean rate for women with Medicaid but not women with private insurance. Further we found the number of obstetricians/gynecologists per capita predicted increased cesarean rate for women with private insurance only, and the number of midwives per capita predicted increased vaginal birth rate for women with private insurance only. CONCLUSIONS: Factors associated with geographic variation in cesarean delivery, a frequent and high-resource inpatient procedure, vary somewhat by payer. Using this information to identify areas for intervention is key to improving quality of care and reducing healthcare costs.

Association between the unemployment rate and inpatient cost per discharge by payer in the United States, 2005-2010.

BACKGROUND: Several reports have linked the 2007-2009 Great Recession in the United States with a slowdown in health care spending and decreased utilization. However, little is known regarding how the recent economic downturn affected hospital costs per inpatient stay for different segments of the population. The purpose of this study was to examine the association between changes in the unemployment rate and inpatient cost per discharge for Medicare and commercial discharges. METHODS: We used retrospective data at the Core Based Statistical Area (CBSA)-level from 46 states that contributed to the Healthcare Cost and Utilization Project State Inpatient Databases from 2005 to 2010. Unemployment data was derived from the American Community Survey. An instrumental variable two-stage least squares approach with fixed- or random-effects was used to examine the association between unemployment rate and inpatient cost per discharge by payer because of potential endogeneity. RESULTS: The marginal effect of unemployment was associated with an increase in inpatient cost per discharge for both payers. A one percentage point increase in the unemployment rate was associated with a $37 increase for commercial discharges and a $49 increase for Medicare discharges. CONCLUSIONS: We find evidence that the inpatient cost per discharge is countercyclical across different segments of the population. The underlying mechanisms by which unemployment affects hospital resource use however, might differ between payer groups.

Racial Disparity in Duration of Patient Visits to the Emergency Department: Teaching Versus Non-teaching Hospitals.

INTRODUCTION: The sources of racial disparity in duration of patients' visits to emergency departments (EDs) have not been documented well enough for policymakers to distinguish patient-related factors from hospital- or area-related factors. This study explores the racial disparity in duration of routine visits to EDs at teaching and non-teaching hospitals. METHODS: We performed retrospective data analyses and multivariate regression analyses to investigate the racial disparity in duration of routine ED visits at teaching and non-teaching hospitals. The Healthcare Cost and Utilization Project (HCUP) State Emergency Department Databases (SEDD) were used in the analyses. The data include 4.3 million routine ED visits encountered in Arizona, Massachusetts, and Utah during 2008. We computed duration for each visit by taking the difference between admission and discharge times. RESULTS: The mean duration for a routine ED visit was 238 minutes at teaching hospitals and 175 minutes at non-teaching hospitals. There were significant variations in duration of routine ED visits across race groups at teaching and non-teaching hospitals. The risk-adjusted results show that the mean duration of routine ED visits for Black/African American and Asian patients when compared to visits for white patients was shorter by 10.0 and 3.4%, respectively, at teaching hospitals; and longer by 3.6 and 13.8%, respectively, at non-teaching hospitals. Hispanic patients, on average, experienced 8.7% longer ED stays when compared to white patients at non-teaching hospitals. CONCLUSION: There is significant racial disparity in the duration of routine ED visits, especially in non-teaching hospitals where non-White patients experience longer ED stays compared to white patients. The variation in duration of routine ED visits at teaching hospitals when compared to non-teaching hospitals was smaller across race groups.

Medicare and commercial inpatient resource use: impact of hospital competition.

OBJECTIVES: To examine the influence of hospital competition on small-area inpatient resource use by payer. METHODS: We measured hospital competition and inpatient resource use using data from the 2008 Healthcare Cost and Utilization Project State Inpatient Databases. Generalized linear models adjusted for patient, population, and market characteristics were used to assess the relationship between inpatient resource use and hospital competition. RESULTS: Hospital competition had a similar influence on inpatient resource intensity for Medicare and privately insured patients. Hospitals in more competitive markets had significantly lower costs per discharge for both Medicare and privately insured patients. Hospital competition was not significantly associated with length of stay per discharge for either payer. CONCLUSION: Findings suggest that policies or incentives that promote or encourage competition in less competitive markets may reduce variation in resource use for both Medicare and private payers.

Estimating inpatient hospital prices from state administrative data and hospital financial reports.

OBJECTIVE: To develop a tool for estimating hospital-specific inpatient prices for major payers. DATA SOURCES: AHRQ Healthcare Cost and Utilization Project State Inpatient Databases and complete hospital financial reporting of revenues mandated in 10 states for 2006. STUDY DESIGN: Hospital discharge records and hospital financial information were merged to estimate revenue per stay by payer. Estimated prices were validated against other data sources. PRINCIPAL FINDINGS: Hospital prices can be reasonably estimated for 10 geographically diverse states. All-payer price-to-charge ratios, an intermediate step in estimating prices, compare favorably to cost-to-charge ratios. Estimated prices also compare well with Medicare, MarketScan private insurance, and the Medical Expenditure Panel Survey prices for major payers, given limitations of each dataset. CONCLUSIONS: Public reporting of prices is a consumer resource in making decisions about health care treatment; for self-pay patients, they can provide leverage in negotiating discounts off of charges. Researchers can also use prices to increase understanding of the level and causes of price differentials among geographic areas. Prices by payer expand investigational tools available to study the interaction of inpatient hospital price setting among public and private payers--an important asset as the payer mix changes with the implementation of the Affordable Care Act.

Duration of patients' visits to the hospital emergency department.

BACKGROUND: Length of stay is an important indicator of quality of care in Emergency Departments (ED). This study explores the duration of patients' visits to the ED for which they are treated and released (T&R). METHODS: Retrospective data analysis and multivariate regression analysis were conducted to investigate the duration of T&R ED visits. Duration for each visit was computed by taking the difference between admission and discharge times. The Healthcare Cost and Utilization Project (HCUP) State Emergency Department Databases (SEDD) for 2008 were used in the analysis. RESULTS: The mean duration of T&R ED visit was 195.7 minutes. The average duration of ED visits increased from 8 a.m. until noon, then decreased until midnight at which we observed an approximately 70-minute spike in average duration. We found a substantial difference in mean duration of ED visits (over 90 minutes) between Mondays and other weekdays during the transition time from the evening of the day before to the early morning hours. Black / African American patients had a 21.4-minute longer mean duration of visits compared to white patients. The mean duration of visits at teaching hospitals was substantially longer than at non-teaching hospitals (243.8 versus 175.6 minutes). Hospitals with large bed size were associated with longer duration of visits (222.2 minutes) when compared to hospitals with small bed size (172.4 minutes) or those with medium bed size (166.5 minutes). The risk-adjusted results show that mean duration of visits on Mondays are longer by about 4 and 9 percents when compared to mean duration of visits on non-Monday workdays and weekends, respectively. CONCLUSIONS: The duration of T&R ED visits varied significantly by admission hour, day of the week, patient volume, patient characteristics, hospital characteristics and area characteristics.

Geographic variation: a view from the hospital sector.

Efforts to characterize geographic variation in health care utilization and spending have focused on patterns observed with Medicare data. The authors analyzed the Healthcare Cost and Utilization Project national all-payer data for inpatient stays to assess variation in hospitalizations by age groups and, consequently, to understand how utilization of the Medicare population may differ from the population of other payers. The authors found that the correlation between inpatient discharges and costs per capita for the Medicare-eligible population over 65 and younger age groups increased from moderate to strong with age. These findings suggest examining Medicare inpatient data alone may provide a useful but not comprehensive understanding how hospital utilization and costs vary for the total population.