Cost concepts in intensive care medicine

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Cost concepts inintensive care medicine

• Dr. Herbert Vesely

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Why care about costs?

• USA 1992
• US 463 - 12.917 per patient / day
• 5 - 10 hospital beds are ICU beds
• gt 20 of hospital charges for ICU services
• ICU costs more than 1 of GNP
• ICU costs ward costs 1 2 - 5

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The cheaper the better?

• India (Parikh et al. Crit Care Med 1999)
• Similar patients (APACHE II)
• 87 TISS points per patient / stay
• (1/2 - 1/3 of western ICUs, less interventions?)
• US 57 per patient / day
• (Noseworthy et al. 1996 Can 1.508 475
• lower salaries?)
• Mortality 36
• (more than twofold comorbidities?)

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Chalfin (Intens Care Med 1995)

• Cost-effectiveness analysis facilitates the joint
  assessment of economical and clinical outcomes.
• General approach
• Explicit identification of all strategies and
  choices
• Explicit stipulation of the studys perspective
• Determination of all cost
• Specification and determination of benefits
• Specification of the time frame
• Determination of the cost-effectiveness ratio
• Sensitivity analysis

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Chalfin (Intens Care Med 1995)

• from Drummond et. al.

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Gyldmark et al. (Crit Care Med 1995)

• Meta-analysis, 20 published cost studies
• US 1.783 - 48.435 per patient / stay
• Reasons for variations
• Technical development (affecting costs ? or ?)
• Case-mix (age, diagnosis, severity of illness,
  therapy ...)
• Unit characteristics (size, staffing, treatment
  policies, research and training activities)
• Possibilities for treatment and care
• Methods for costing (methodological bias) ?

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Gyldmark et al. (Crit Care Med 1995)

• Different cost components
• 7/20 include medical time (staff)
• 10/20 include clinical services
• 8-10/20 include consumables
• Different approaches
• 15/20 bottom-up
• 4/20 top-down
• 1/20 used both methods

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Top-down vs. Bottom-up costing
The Top Down approach divides the ICU budget
by the number of patients to obtain an average
cost per patient
The Bottom Up approach involves the assignment
of costs to the individual patient, according to
the resources used by that patient, building
individual patient costs
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Bottom-up costing

• Summing up the resources used by an individual
• patient and building them into the total costs of
• patient care.
• An activity can be defined as any tasks
• requiring the use of resources
• (e.g. introduction of a central venous line
  pressure line,
• nursing and medical time, dressings, drugs,
  chest X-ray)
• Very complex and time consuming ?
• only for a limited period of time

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Dickie et al. (Intens Care Med 1998)

• 257 patients, 916 TISS-scored pat. days
• var. costs nursing, consumables, clinical supp.
  services
• fixed costs other staff, capital equipment,
  estates
• 796 costs per patient / day
• 541 variable costs (1 TISS 25)
• 255 fixed costs
• for pat. groups good correlation variable costs -
  TISS per patient day r 0.87, p lt 0.001
• per patient stay r 0.93, p lt 0.001
• for individual pat. range of error 65

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Top-down costing

• Take the costs of intensive care and apportion
• them in different sub-groups.
• (most simple mean cost per patient per day
• total annual costs / total number of patient
  days
• Total annual costs in the ICU are usually
• divided into subgroups as staff, drugs,
• lab costs, capital equipment etc.
• ? cost blocks

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Differences

• Top down costing
• only for groups of patients
• only retrospective
• Bottom up costing
• also for individual patients
• prospective as well as retrospective
• Most common bottom up retrospective

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Problem with definitions

• Total costs
• The cost of producing a particular quantity of
  output
• Fixed costs
• Costs which do not vary with the quantity of
  output
• in the short term ( 1 year), e.g. rent, salaries
• Variable costs
• Costs which vary with the level of outputs
• e.g. drugs, disposables
• Intangible costs, marginal costs, overhead costs
  ...

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EURICUS III

• Implementation of guidelines for budget control
• and cost calculation and their effect on the
  quality
• of management of ICUs
• Dinis Reis Miranda et al. (completed 2001)
• 45 ICUs in 10 European countries
• 9.300 patients, 53.133 patient days
• 1.050 per patient / day

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EURICUS III

• Fixed costs 51.5
• Labour 46.0 (39-55) nurses 28
• Equipment 5.5 (3-24)
• Variable costs 48.5
• Blood products 4.8
• Clinical services 17.5 (lab tests 7)
• Non clinical services 7.2
• Pharmaka 15.4
• Disposables 6.6

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Proxies for cost calculation

• APACHE II
• Score measuring severity of illness on admission
• Relation of APACHE II and patient-specific costs
  of
• first 24 h plt0.004 (Edbrooke Intens Care Med
  1997)
• TISS
• 1974 described as a measure of nursing workload
• Nursing costs
• Strong correlation to direct nursing hours
  (r20.98)
• DRGs
• Use in intensive care medicine is relatively
  untried

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Smithies et al. (Rean Urg 1994)

• TISS points as cost proxy
• 1 TISS point 27.50 (1990)
• 2.235 costs per patient / stay
• 1.680 costs per survivor
• 4.923 costs per non survivor
• 2.696 effective costs per surv. (cost all
  pat./ n surv.)
• Clinical efficiency/Cost effectiveness
• e.g. parenteral ? enteral nutrition (gut
  protection)
• ? mortality ? 23.2, ECPS ? 12.6

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What is the cost block programme?
A method for costing intensive care, that can
be easily applied in any ICU
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Cost blocks (D. Edbrooke)

• Capital equipment
• Estates
• Non-clinical support services
• Clinical support services
• Consumables
• Staff

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Capital equipment

• Maintainance of equipment
• Depreciation
• Hire charges
• Problems
• some ICUs do not have automated asset registers
• low costs with old (gt10 years) equipment
• high costs with new ICUs
• lot of effort to collect in a meaningful way

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Estates

• Water - Gas - Electricity
• Building depreciation
• Building engineering maintainance
• All estates costs apportioned to the ICU
• are based on the floor area
• Problems
• Methods of working out floor area
• Twofold difference in cost determination

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Non-clinical support services

• Services required for the functioning of an ICU
  which are not specifically related to patient
  therapy and are not supplied by the ICU
• ICU administration
• Hospital management

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Clinical support services

• Services which are directly related to patient
• therapy but are not supplied by the ICU
• Physiotherapy
• Radiology
• Laboratory services
• Pathology and mortuary
• Theatres
• Pharmacy
• Transfer
• etc.

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Consumables

• Drugs and fluids
• Total expenditure on drugs and fluids
• Top 10 most expensive (cost x amount used)
• Costs of nutritional products
• Blood and blood products
• Disposable costs

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Staff

• Medical staff
• Nursing staff
• Technicians

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Cost blocks (D. Edbrooke)

• Data from cost blocks 1-3
• Collection is difficult and time consuming
• Numerous inaccuracies
• Not related to clinical activity
• Not within the control of the ICU
• Represent 15 of total cost
• Data from cost blocks 4-6
• Represent 85 of total cost
• Are within control of clinicians and nurses

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TOTAL COST VARIATION
Total Cost vs. Number of patient days
89 explained by
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TOTAL ANNUAL COSTS
Mean 1,649,550
Range 927,245 - 3,807,528
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Conclusions (I)

• The subject of cost effectiveness in intensive
  care medicine has become more important with
• Rise of health care costs
• Reduction in available resources
• The frequency of use of these analysis has
  exploded over the past few years
• ICUs will benefit from objective cost effective
  analysis ?

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Conclusions (II)

• Economic considerations can have a positive
  impact on health care delivery
• Processes and structures can be streamlined
• Waste and redundancy eliminated
• Possible consequences
• Improved triage for admission/discharge
• Identification of patients that benefit most from
  ICU care
• Reduction in unnecessary procedues and
  interventions
• Shorter ICU and hospital lenght of stay

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Conclusions (III)

• For comparison pay attention to
• Different cost components
• Different approaches
• Case-mix
• Unit characteristics
• Possibilities for treatment and care
• Cost-cutting measures can lead to reduced quality
  of care and worse patient outcomes !!