# Presentation: 533412

## Estimating Cost at Each Stage of Care

- Mark Smith, PhD
- Paul Barnett, PhD
- Ciaran Phibbs, PhD
- HERC Cyberseminar
- February 28, 2007

## Estimating Cost at Each Stage of Care

- Mark Smith, PhD
- Paul Barnett, PhD
- Ciaran Phibbs, PhD
- HERC Cyberseminar
- February 28, 2007

## Outline

- 1.   Overview
- 2.   Decision Support System
- 3.   HERC or DSS Costs?
- 4.	Fee Basis and Prosthetics Data
- 5.	Examples and Q&A

## Research 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 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 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 System (DSS) Cost Data

- Paul G. Barnett, PhD

## Cost assignment in DSS Production System

- Cost allocated to departments
- Cost of supplies, contracts
- Staff time allocations (data unique to DSS)

## Cost assignment in DSS Production System

- Allocate costs to production units (ALB)

## DSS assigns costs to products

- Indirect (overhead) costs are distributed to patient care departments
- Intermediate products counted
- All services and products in VISTA (VA electronic medical records)
- Relative Value Units (RVUs) assigned to products and totaled
- Cost per RVU used to find cost of each intermediate product

## DSS Production System

- Allocate costs to production units (ALB)

## DSS National Data Extracts 

- Production system not accessible
- National Data Extracts
- SAS files available at VA national computing center in Austin, TX
- Web based report generator (VSSC web site)

## DSS National Data Extracts

## Department-level cost files

- Account Level Budget Cost Center
- Detail cost by cost center
- Useful to find personnel cost, overhead rates

## Encounter-level DSS Cost Files

- Inpatient files
- Discharge file
- Treating specialty (bed section) file
- Outpatient Files
- Outpatient cost
- Low-cost outpatient visit file
- Daily pharmacy cost

## Encounter-level cost detail files

- Cost sub-totals
- Prescription file
- Intermediate Product Department Files
- Lab, radiology extracts

## Advantages of DSS

- Reflects on-site review of staffing, costing, workload
- Sums to actual VA costs
- Consistent with utilization data
- Useful to study VA efficiency
- Doesn’t rely on assumptions based on coding or non-VA relative values

## Improvement in DSS cost estimates

- Better data on inpatient medical procedures
- Improvements via standardization, audit, and review
- NDE filters out erroneous records

## HERC or DSS Cost DataHow Do They Compare?

- Ciaran Phibbs, PhD

## Quick Overview of HERC Average Cost Estimates

- Acute (med/surg) inpatient care
- DRG weights with adjustments for length of stay and ICU days
- Scale to actual VA costs by category of care
- Other inpatient care
- Per diem costs, by category of care

## Quick Overview of HERC Average Cost Estimates, Continued

- Outpatient care
- Assign private sector (mostly Medicare) RVUs to VA CPT codes
- Scale to actual VA costs by category of care
- Category costs from CDR FY 98-03
- Category costs summaries of DSS since  FY 04

## Implications, DSS vs. CDR

- 98-03, CDR assigned more costs to inpatient care, and less to outpatient care than DSS
- For 98-03, need to be careful about mixing HERC and DSS cost estimates.
- 		e.g. use DSS for outpatient care and HERC for inpatient care would over-estimate costs

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

- HERC web site
- www.herc.research.va.gov/publications
- Separate guidebooks for inpatient, outpatient, and person-level data.
- Additional information about these data in Technical Reports.

## HERC vs. DSSPerson-Level Costs 

- Person-level (per year) costs are similar
- Overall correlation = 0.72
- Inpatient acute med/surg correlation = 0.66
- Other inpatient care correlation = 0.77
- Outpatient care correlation = 0.51

## HERC vs. DSSOutpatient Encounter Costs 

- At the encounter level, overall correlation between HERC and DSS only 0.26
- If trim the top and bottom 1% relative outliers, the correlation increases to 0.72

## Differences Between HERC & DSSOutpatient Encounter Costs 

- Surgery more likely to have much higher DSS costs
- Categories with many low cost items, such as labs, are much more likely to have large relative differences

## How to Choose HERC vs. DSS Costs

- Study design is the most important consideration
- HERC costs are based on non-VA weights or RVUs.
- DSS designed to capture actual VA production costs
- Examine the costs that are important to your study

## When not to use HERC AC Outpatient dataset

- If your study will have systematic differences on within CPT code resource use.
- Example, add a brief smoking counseling component to physician visit
- Study focuses on CPT codes that HERC used imputed values for.
- Using local cost estimates, and they don’t seem correct.  There could be errors in the CDR allocations that HERC relies on.

## The Fee Basis (FEE) filesMark W. Smith, PhD

## Overview of Fee Basis Program

- Pays for care at _non-VA facilities_ in three situations:
- VA cannot provide the care locally
- It is economical to do so
- Travel to a VA facility is medically infeasible

## Overview of Fee Basis Program

- Some common uses:
- Community nursing home care
- Home-based care
- E.g.: long-term oxygen therapy
- Compensation & pension exams

## Overview of Fee Basis files 

- Subset of all VA contract care
- Most “sharing agreement” care from affiliate universities is _not_ included
- Substantial non-VA utilization unaccounted for

## What Data Rows Represent

- Outpatient:  a single service provided, reflected in the CPT procedure code
- Inpatient: all days of stay within the invoice period (typically a calendar month).
- 	A single inpatient stay may be billed in multiple invoices and hence multiple Fee Basis records for the patient.

## Highlights of Patient Data

- Scrambled SSN  (SCRSSN)
- Primary Service Area (PSA)
- 	3-digit VA station number
-  Can be linked by SCRSSN to other VA databases to find other patient-level variables

## Highlights of Clinical Data

- Outpatient:
- Date of service
- 1 CPT procedure code
- Inpatient:
- Start and end dates of invoice period
- Up to 5 surgery codes
- Up to 5 ICD-9 diagnosis codes

## Highlights of Financial Data

- Amount claimed by vendor
- Amount paid
- Medicare prospective payment amount (inpatient)

## Highlights of Vendor Data

- Vendor ID
- Address (city, state, zip)
- Related VA station number

## Creating Discharge Records (1)

- Goal:  Create a single discharge record from multiple inpatient service (INPT) records
- Method:  Concatenate by SCRSSN using TREATDTF and TREATDTO
- Use VENDID to find a transfer from one provider to another

## Creating Discharge Records (2)

- Records are typically processed within 30 days of invoicing.
- 			BUT
- Invoices may be sent LONG after services are rendered.
- 		    THEREFORE
- To find all services in a fiscal year, look in the Fee Basis files in that year _and_ the 2 following years.

## Overlap with Other VA Files

- Community  nursing home care also in
- DSS outpatient files
- PTF Extended Care files
- Most completed hospital stays also in PTF Non-VA Hospitalization files

## National Prosthetic Patient Database 

## NPPD 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 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 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 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 Reports

- Fee Basis data:  report completed
- NPPD: report in progress
- URL:  http://www.herc.research.med.va.gov/publica
-            tions/technical_reports.asp

## Using Multiple Datasets: Examples

## A 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 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

## Cost of Joe’s Care

- 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

## Cost of Joe’s Care

- 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

## Cost of Joe’s Care

- 3. VA emergency room care
- Utilization:				Cost:
- 	- DSS NDEs 			- DSS NDEs
- 	- PTF, OPC 			- HERC AC

## Cost of Joe’s Care

- 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.

## Cost of Joe’s Care

- 4.  Inpatient mental health bedsection
- 	_Utilization_			_Cost_
- 	DSS NDEs 			DSS NDEs
- 	PTF				HERC AC

## Cost of Joe’s Care

- 4.  Inpatient mental health bedsection, cont’d
- Cost
- 	DSS 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 

- 5.  Telehealth
- 	_Utilization_		_Cost_
- 	OPC			HERC AC
- 	DSS NDE		DSS NDE
- Be sure to validate!  Consider using self-report or provider report if datasets are inaccurate.
- Note: DSS lacked telehealth before FY2003.

## Cost of Joe’s Care 

- 6.  PTSD Group Therapy
- 	_Utilization_		_Cost_
- 	OPC			HERC AC
- 	DSS NDE		DSS NDE
- Either option is reasonble; there is likely to be little variation in cost across therapy sessions.

## Cost of Joe’s Care 

- 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.

## Cost 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 

**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 

- 1.  Non-VA orthopedist
- 	_Utilization_		_Cost_
- 	Medicare		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.

## Cost of Evelyn’s Care 

- 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

## Cost of Evelyn’s Care 

- 3.  VA inpatient med/surg
- 4.  Outpatient pulmonologist, PCP, physical therapy
- 	_Utilization_			_Cost_
- 	DSS NDE   			DSS NDE
- 	PTF/OPC			HERC AC
- DSS preferable for inpatient, both acceptable for outpatient.  (Use DSS for all – best not to mix DSS and HERC data.)

## Cost of Evelyn’s Care 

- 5.  VA prescription medications
- 	_Utilization_			_Cost_
- 	DSS Pharmacy NDE	DSS Pharmacy NDE
- 	PBM				PBM (direct cost only)

## Cost of Evelyn’s Care 

- 6.  Walker
- 	_Utilization_			_Cost_
- 	no 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.

## Cost of Evelyn’s Care 

- 7.  Long-term oxygen therapy
- 	_Utilization_			_Cost_
- 	NPPD	* **	*		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?herc@va.govwww.herc.research.va.gov