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Data Collection Tool for Hospital Utilization and Cost Patterns

Lynn Hill Spragens, MBA, The Bard Group, LLC


To assist in the collection of relevant data about hospital utilization and cost patterns, that will help ensure that the Palliative Care program is designed to maximize its positive impact, and is realistic about volume, revenue, and cost assumptions.

Methodology Recommendations:

  • Requests for information should be approved by the Medical Director, VP of Medical Affairs, or other individual with oversight responsibilities for patient and physician information access and use. This will make it easier to get information from support staff who must be cautious about data dissemination.

  • The Approved Request should be in writing, and should be supported by a face-to-face meeting with the staff member who will be responsible for running reports or releasing information; this allows for request clarification and compromise, to balance the ideal data and the data that may be available in a timely and non-disruptive fashion from existing sources.

  • It is usually advisable to review samples of existing reports to clarify the request, the available data field definitions, and assess depth of initial reporting. Depending on the systems used, analysts may prefer to run summary and detailed reports (case by case data for selected DRGs) at the same time, or to wait for summary data review and then respond to a more targeted detailed data request. Analysts may have suggestions for reliable time ranges, data that needs to be excluded, etc.

  • After initial review of data, it is advisable for the requester (Palliative Care leader) to schedule a follow-up meeting with the staff member/data source, and possibly with a manager who has used the data in the past (Medical Director, UM manager) to assist in interpretation of the report.

  • Always remember and repeat that you are looking for representative data that will allow you to do some basic modeling, or early stage interventions; it does not have to be perfect, although it is always helpful to UNDERSTAND the data's imperfections.

  • When reviewing sample reports, always clarify how you might get it in the future, whether it is a customized report or a canned report, and how hard it was to get, so that you can use this information when deciding what data to use for ongoing measures of program impact.

Preliminary Questions

(Ask BOTH the Utilization Management Director (or equivalent role) AND a manager from Finance or Inpatient Billing)

  1. Palliative Care programs often contain the following features:

    1. Focus on coordination of patient care needs across departments

    2. Inclusion of other healthcare professionals in the care planning, care delivery, and family communication.

    3. Emphasis on patient and family involvement in making care decisions

    4. Strong advocacy for consistent, well-documented care processes

    5. A focus on symptom management and a conservative approach to interventions and daily orders that may discomfort the patient and not improve outcomes

    Can you identify other initiatives currently underway, under discussion, or recently completed that have overlapping or complementary objectives? If so, whom might we talk to for more information?

  2. What reports can be generated based upon DRG classification? Are there samples that you can review, to focus your data requests on easily available information?

  3. Who are the users of this data now? What are some examples of other hospital projects that have used data about case type, LOS, and practice variation?

  4. What data fields are available? Is there a list available for easy review? In particular, are the following fields available for analysis:

    1. DRG description field
    2. Admitting MD
    3. Attending MD
    4. Admissions (perDRG)
    5. Mean and/or Median LOS by DRG
    6. Payer breakdown/classification (focused on Medicare, Medicaid, Commercial, other)
    7. Billed Charges per case
    8. Net revenue (paid charges) per case
    9. Bed type (ICU, Medicine, Pediatrics, etc)
    10. ICD9s
    11. DOS
    12. Patient AGE (and other demographics)
    13. Other fields we should have asked about!?

  5. Is there a Cost Accounting system? Any methodology for approximating the cost of different bed types or the utilization of resources? If so, what types of reports are available?

    In particular, we are interested in the impact of expediting transfer of appropriate patients from the ICU to Medicine beds, and our care plans may use less ancillary resources such as daily lab tests, radiology, and administered drugs, so we are interested in any information available that might assist in estimating impact, or serve as a baseline for monitoring impact.

  6. Are there any reports that report either billed charges or costs by major cost center category, by admission? For example, some hospitals can report the breakdown of lab, radiology, pharmacy, OR, and "room and board" for each admission. Thus they can generate reports that can profile resource use by MD or by DRG, or by both. Then it is possible to extract information about the average cost of pharmacy for DRG xxx, by attending physician. This is really helpful when looking for variation that can be impacted by more consistent practices.

  7. How are transfers between bed types handled in the data systems? For instance, if a patient had a total length of stay of 10 days, and 2 were in the ICU, when looking at admissions by bed type and ALOS by bed type and total days by bed type, what would we expect to see? [This will help clarify what we ask for and how we use it.]

  8. Does the institution have any data on inpatient DRG utilization benchmarks, such as Milliman and Robertson LOS targets? If so, what is available and how is it currently being used?

  9. A Palliative Care program can contribute significantly to cost avoidance through reducing resource waste that drives cost/day, and reducing LOS for Medicare patients. Are there other programs that have been funded based upon estimated cost avoidance, rather than income production? For example, Utilization management, or Formulary initiatives? If so, who could I talk with to learn more about their methodology for tracking contribution vs cost?

Applicable to Finance Interviews Only

  1. What is the BUDGET CYCLE of the institution? Of the faculty practice (if applicable)? [ie is it calendar year or fiscal year, and when does fiscal year begin?]

  2. What is the budget process and timetable applicable to new programs? In our institution, what are the options for budget consideration? Are there required formats? Can I get a copy?

  3. If our program generates some revenue through consults (professional billings), who will be the billing agent or department? What other professional billing do they currently do? Can you give me a contact name?

  4. If our program is implemented, we may have some staff (RNs, Social Worker, etc.); who could we talk to about HR issues, estimated salary rates, etc?

  5. Can you describe the hospital payer mix, and contract types and how this configuration impacts the financial priorities of the hospital? [ie FFS vs Case Rate vs Risk Sharing or Cap]?

  6. What percentage of net revenue is from Medicare? From Medicare Risk?

  7. What is the average occupancy rate in the hospital? How does this differ by bed type? Are there any services with serious capacity constraints, which may be reducing the hospitals ability to attract referrals? [For example, ICU].

Specific DATA requests for DRG information

In all cases, be prepared to amend your request if you discover more pertinent, easy-to-use information availability. Most hospital systems CAN report admissions, days, billed charges and net revenues. Some cannot report any reliable cost information. Depending on analyst advice, you may want to request only one version (possibly #6) and examine it closely, to identify any modifications needed before the versions are run.

Can the following information be reported as follows?

  • Based upon ALL hospital cases?

  • Can it also be reported excluding OB, Peds, and Psychiatry? (Consider other exclusions that may be appropriate to your setting.)

  • Use a representative time period that is complete (most bills have been paid and patients discharged); usually this is prior year.
  1. Top 20 DRGs, based upon number of admissions
  2. Top 20 DRGs, based upon total annual inpatient days
  3. Top 20 DRGs, based upon amount of billed charges
  4. Top 20 DRGs, based upon amount of net revenue or paid charges
  5. Top 20 DRGs, based upon total costs incurred, if available
  6. Top 20 DRGs, for Medicare patients

For each version (1 through 6) of Top 20 DRGs , please include any of the following information that may be available:

  • Number of admissions (per DRG)
  • Number of total days (per DRG)
  • ALOS per DRG
  • Total or average billed charges per DRG
  • Total or average net revenue or paid charges per DRG

What is the hospital's Base Conversion Factor for Medicare DRG reimbursements? ________ [This should be a dollar amount between $3000 and $10,000.]

If we provide you with a list of the most frequently used CPT codes for our program, can you provide us with the local Medicare reimbursement rates, and the median commercial reimbursement rates or representative rates?

Additional Resources

Financial Planning -Grand Rounds
Lynn Hill Spragens, MBA, offers sound advice on developing the financial plan for your palliative care program in an hour audio presentation.

Creating a Compelling Business Case for Palliative Care: Financial Models
A CAPC Management Training Seminar
July 2001, Oakland, CA
PowerPoint Presentation

Other Resources By

Lynn Hill Spragens, MBA

The Bard Group, LLC

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