How to contain costs when lengths of stay are low

The first step? Find out where the money’s going

Case managers have long known that length of stay (LOS) is, at best, an imperfect measure of a case management department’s success. After all, shaving off patient days doesn’t mean much if you’ve simply crammed the same processes and procedures into a shorter time frame — or if you’ve revised those processes poorly and actually introduced errors or inefficiencies into the system of care.

Although LOS remains on the decline in most parts of the country, recent studies indicate that in the West, with its high managed care penetration, lengths of stay have leveled off and even shown slight increases since 1996, largely because of mandated minimum stays for childbirth. When LOS has been taken as low as it can safely go, some case management experts are asking, what happens next?

"LOS is a good news/bad news measure," says Beverly Cunningham, RN MS, regional director of clinical effectiveness at Mercy Health Partners of Toledo, OH. "If your LOS is low, pat yourself on the back. But that doesn’t mean you have low costs, it doesn’t mean your processes are efficient, and it does not mean that you’ve met the standards of care."

Cunningham recommends that case managers look beyond LOS to review whether clinically appropriate care was given to the patient without delays and whether physicians accomplished what they meant to. Other areas to consider when LOS is low are readmissions, outcomes, reimbursement, and denials.

The first step in finding out where the money is going when the LOS rate is low is to collect data, which give case managers and physicians evidence that can be used as a model to reduce costs and provide better care.

Deborah Hale, president of Administrative Consultant Services in Shawnee, OK, says data also help you focus. Using pneumonia as an example, a hospital could collect data on the length of time patients are administered IV antibiotics as opposed to the amount of time they are given oral antibiotics. The data should include the frequency and necessity of lab tests, the length of time it takes to get the results back, and whether the tests could have been done on an outpatient basis. Any delays in either receiving completed tests or administering the tests also should be documented, because these are the types of problems that cost money.

Rather than looking at individual cases where variations such as comorbid illnesses can impact results, data should be reviewed in large volumes where case managers can make the most difference, Hale says.

Data are not useful unless they are shared, says Cunningham, who adds that case managers should avoid the mistake of "collecting information and failing to get it back to people who can make a difference."

Cunningham says, "The ultimate goal of case managers is linking people who are out there delivering care to their outcomes. We develop wonderful clinical paths, but the most wonderful part is people who sit down and talk to each other because they are going to link what you talk about to their practice. We will never make a difference in cost until we start taking some of these issues back to the bedside, to the people who make a difference. Even if you think doctors are not working with you and staff nurses aren’t working with you, look at LOS two years ago and compare them to now; someone is working with you."

Individual patient information can be given to doctors, nurse managers, case managers, and social workers so they can compare themselves to others, Cunningham says. Hospitals also should compare themselves to hospitals of similar size and location on a quarterly and/or annual basis to determine if their procedures and prices are competitive and cost-effective. Hospitals that lack a compatible facility for comparison should trend themselves from one quarter to the next.

For hospitals that trend, Cunningham suggests looking at high-cost contributors for a given illness. If the LOS goal for pneumonia patients is 4.5 to five days, review the percentage of those who stayed longer than that to determine if anything could have been done to shorten the stay while providing appropriate care.

If there’s one illness in particular that is costing the hospital money, Cunningham says that’s a red flag for case manager involvement.

Spending money wisely

To conserve money, the best and most effective devices and medicines should be used. "Maybe we are using the most expensive devices because we’ve always used them, which doesn’t necessarily mean they are the best," Cunningham says.

Just because certain procedures have been used over time, that doesn’t mean they are the most appropriate for patients. That’s where the concept of "evidence-based medicine" comes in.

Physicians have always based their care on research, but evidence-based medicine is proof that certain procedures and practices will result in success, says Bimal Jain, MD, pulmonologist at North Shore Medical Center Union Hospital in Lynn, MA. "It provides evidence for what you are doing, and evidence only comes through data — and you can’t argue with data," says Jain.

Evidence-based medicine, which standardizes or controls care, also benefits physicians when it validates that the procedures and practices in place are the most cost-effective and beneficial to the patient and the hospital.

Through this type of grounded research, case managers can get a better understanding of why procedures are handled in a certain way, says Larry Strassner, RN, MS, manager of health care consulting at Ernst and Young LLP in Philadelphia. When administering blood, the common practice is to take vital signs every half-hour because it is "what we’ve learned over time." However, research could prove another method is more effective and less expensive.

Case managers also should examine readmissions within 15 days of discharge when the LOS begins to drop, cautions Aileen Day, director of medical management at North Shore Medical Center in Lynn, MA. After the patient is released and the insurance company is billed, case managers should be aware of the percentage for which the hospital is reimbursed and the costs of procedures.