Low managed care hospitals decrease costs
Low managed care hospitals decrease costs
Facilities in low managed care (LMC) areas are reducing hospital stays and costs faster than those in high managed care (HMC) areas, according to The 1998 Procedures Resource Book — A Guide to Inpatient Surgical Procedures. Sponsored by the Center for Healthcare Industry Performance Studies, a leading health care information company specializing in clinical and financial benchmarking, the publication bases its performance results on 65 procedures.The publication’s analyses show that the LMC average hospital length of stay went from 9.77 days in 1993 to 7.51 days in 1996, while the HMC length of stay went from 7.87 days to 6.40 days. Put another way, the LMC rate decreased by 2.26 days compared to a slower HMC rate of 1.47 days.
"The fact that facilities located in low managed care areas have closed the gap in length of stay with facilities in high managed care areas can be attributed to the trend toward restrictive reimbursement patterns throughout the industry," explains Susan White, PhD, the book’s author. "Facilities in areas with high managed care penetration reduced their lengths of stay long ago and now are faced with many contracts based on a per-diem rate, causing their length of stay to stabilize."
The study’s results show this trend holds true for costs as well. The LMC average total cost went from $9,131 in 1993 to $8,602 in 1996, while the HMC average cost was reduced from $8,455 to $8,092 for the same time period.
"The trend in cost reduction is not as strong as that for length of stay, but the conclusion is that facilities in areas with low levels of managed care activity are reducing the average cost per case at a faster rate than those located in high managed care areas," White states in the book. t
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