1. Advances in VA Utilization and Cost Data VA HSR&D National Meeting February 16, 2005 Mark W. Smith Paul Barnett Todd Wagner

2. Health Economics Resource Center2 Outline 1.Overview 2.DSS NDEs vs. HERC average cost data 3.DSS intermediate product data 3.NPPD prosthetics data 4. Fee Basis data

3. Health Economics Resource Center3 Study objectives and data needs VA Utilization Non-VA Utilization Patient costs

4. Health Economics Resource Center4 VA Utilization HERC Annual Person-level costs Encounter Level DSS Intermediate Product Specialty care: e.g., prosthetics

5. Health Economics Resource Center5 VA Utilization HERC Annual Person-level costs Encounter Level DSS Intermediate Product HERC DSS Bedsecn Discharge TRT Discharge Opat Specialty care: e.g., prosthetics Pharmacy Med/surg Rehab, MH, LTC

6. Health Economics Resource Center6 VA Utilization HERC Annual Person-level costs Encounter Level DSS Intermediate Product HERC DSS Bedsecn Discharge TRT Discharge Opat Specialty care: e.g., prosthetics Pharmacy Med/surg Rehab, MH, LTC

7. Health Economics Resource Center7 HERC DSS Discharge TRT Discharge Opat Outpatient Med/surg Rehab, MH, LTC PTF Bedsection files PTF Main files NPCD PTF Bedsection files PTF Main files NPCD easy hard easy very hard easy moderate

8. Health Economics Resource Center8 Non -VA Utilization Paid by VA Not paid by VA Fee Basis Contract Care Out of pocket Private Insurance Medicare/ Medicaid

9. HERC vs DSS Todd Wagner

10. Health Economics Resource Center10 HERC or DSS Strategies for choosing dataset Strategies for choosing dataset –Cost determination method –VA versus non-VA Relative value units –Ease of use

11. Health Economics Resource Center11 Cost Determination Method DSS costs are created using an activity- based costing allocation method DSS costs are created using an activity- based costing allocation method HERC is created using a mixture of methods HERC is created using a mixture of methods Advantage: Advantage: –Inpatient: DSS –Outpatient: Tie

12. Health Economics Resource Center12 RVU-based decision DSS is based on VA relative value units (RVUs); hospitals can modify RVUs DSS is based on VA relative value units (RVUs); hospitals can modify RVUs HERC is based on non-VA RVUs (mostly Medicare) HERC is based on non-VA RVUs (mostly Medicare) Advantage: depends on audience (slight advantage to HERC) Advantage: depends on audience (slight advantage to HERC)

13. Health Economics Resource Center13 Ease of Use HERC annual person level is easy to use HERC annual person level is easy to use HERC discharge dataset merges to PTF main HERC discharge dataset merges to PTF main –Has subtotal costs and LOS for HERC categories Advantage HERC Advantage HERC Caveat: HERC may not exist forever Caveat: HERC may not exist forever

14. Health Economics Resource Center14 Accuracy Is one more accurate? Is one more accurate? Don’t confuse precision and accuracy Don’t confuse precision and accuracy

15. Health Economics Resource Center15 Accuracy Hard to quantify accuracy of cost data Hard to quantify accuracy of cost data –Quality changes over time –Varies by medical center and type of care –True costs are unknown Comparisons to other VA or non-VA costs (construct validity) Comparisons to other VA or non-VA costs (construct validity) Understand the production costs Understand the production costs

16. Health Economics Resource Center16 Outliers DSS is more subject to outliers than HERC DSS is more subject to outliers than HERC DSS tries to weed out high cost outliers in production data DSS tries to weed out high cost outliers in production data

17. Health Economics Resource Center17 Identifying Inpatient Outliers Decompose the discharge data Decompose the discharge data Rehab, MH, LTC: Rehab, MH, LTC: –Calculate a per diem cost –Multiply per diem by LOS –Compare estimated cost to cost Med/surg Med/surg –Calculate cost per DRGwt per day; flag records with >$50000

18. Health Economics Resource Center18 Summary Choice of data should be based on: Choice of data should be based on: –The precision you need –Level of detail –Your audience Choose a primary database (HERC or DSS) Choose a primary database (HERC or DSS) –Don’t mix and match DSS and HERC –Except for HERC with DSS pharmacy

19. Health Economics Resource Center19 Accuracy and Outliers No easy solution No easy solution Consider: Consider: –Comparing costs to other another cost dataset –Investigate DSS production data –Check accuracy of outliers

20. Health Economics Resource Center20 Remainder of Workshop DSS Intermediate Product data: - Greater granularity on procedures National Prosthetics Patient Database (NPPD): - Only source of prosthetics information: cost, type, patients - Essential for rehab studies, polytrauma patients Fee Basis data: - Non-VA costs excluded from HERC average cost data - Most non-VA costs excluded from DSS - Useful for studying outsourcing of care, home-based care

21. Health Economics Resource Center21 DSS Intermediate Product Detail: Looking Inside the Black Box Paul G. Barnett PhD Shuo Chen PhD

22. Health Economics Resource Center22 DSS National Data Extracts National files available at VA national computing center in Austin, TX –Hospital stays –Bed section segment of a stay –Days in outpatient clinic –Day of outpatient pharmacy –Dispensed prescriptions

23. Health Economics Resource Center23 Data in DSS National Data Extracts Total cost of an encounter Some subtotals

24. Health Economics Resource Center24 Study questions Where to DSS cost estimates come from? Are they accurate? –What is importance of previously identified limitations?

25. Health Economics Resource Center25 Where do DSS data come from? Extracts of DSS- SAS Files at Austin Cost of stays and visits DSS VISN Level Production Databases (a “Black Box” to most researchers) Cost of intermediate products, stays, visits

26. Health Economics Resource Center26 Where do DSS data come from? DSS allocates cost to departments DSS finds quantity of services and products from VISTA (VA electronic medical records) DSS assigns set of Relative Value Units (RVUs) to each service and product

27. Health Economics Resource Center27 Intermediate product The products (and services) used during a hospital stay or an outpatient encounter, e.g.: –Days in ward –Number of chest x-rays –Minutes in operating room

28. Health Economics Resource Center28 Where do DSS data come from? DSS combines department costs with count of products and RVUs DSS determines the cost of each intermediate product DSS sums the costs of all intermediate products used in a stay or visit

29. Health Economics Resource Center29 Previously identified problems with DSS cost estimates “Million dollar” products. –Unit costs errors –Encounters assigned extremely high costs

30. Health Economics Resource Center30 Previously identified problems (cont.) Missing medical procedures –At some sites inpatient medical procedures not recorded in a way that can be extracted by DSS –Medical procedures: endoscopy, cardiac catheterization (expensive procedures not recorded in surgical software package) –May result in an underestimate of costs of some hospital stays and outpatient visits

31. Health Economics Resource Center31 Looking inside the “black box” Goals: –Evaluate if unit cost outliers affect cost estimates –Identify if DSS used information on inpatient medical procedures to assign cost –Where procedure data are missing, find the effect on cost estimates

32. Health Economics Resource Center32 Evaluation of DSS cost estimates of stays involving medical procedures Study population: –Clinical trial participants who had cardiac angioplasty Method: –Obtained detailed data on cost of each product used in inpatient stays (2001-2002) –Compared to corresponding record in DSS NDE –Studied stays with angioplasty according to PTF  Evaluated intermediate products of these stays

33. Health Economics Resource Center33 Access to DSS Intermediate Product Detail In production level data (in the black box) –No national level extract of intermediate products (data set would be too large) –Access granted by each medical center –Alternative: DSS national program office can extract detail

34. Health Economics Resource Center34 Access to DSS Intermediate Product Detail Requested data from DSS national program office –Hoped to pilot test method for future use by other researchers –2 year wait to obtain these data –Probably not a viable strategy for other researchers  DSS office not funded to do this work  System not designed to extract data on a cohort

35. Health Economics Resource Center35 Comparison of intermediate product detail to national data extract –Costs in intermediate product data nearly matched national data extracts (NDE)  A very few records for products with costs greater than $30,000 had been excluded in tabulating costs to prepare NDE  Evidently “high cost outliers” are filtered out in preparing NDE  Appropriate to exclude these values

36. Health Economics Resource Center36 Evaluation of intermediate products on cost estimates Study of inpatient stays with cardiac angioplasty –Identified 158 inpatient stays in which angioplasty took place according to Patient Treatment File (PTF) –Identified whether stay had intermediate products for “angioplasty”, “PTCA”, or “catheterization”, etc. –Matched stay to “wage index” assigned to geographic area by Medicare

37. Health Economics Resource Center37 Evaluation of inpatient costs using intermediate products on cost estimates –Mean cost of a stay was $11,941 –55/158 stays (35%) had at least one angioplasty product –Regression  Dependent variable: DSS cost  Independent variables: length of stay, wage, days in ICU, and whether DSS included an angioplasty intermediate product –Stay with at least one angioplasty product were assigned $7,404 greater cost

38. Health Economics Resource Center38 Study limitations Hard to evaluate cost or quantity of an intermediate product –products may be characterized differently at each site, according to work processes and organization Uncertain if we identified all angioplasty products –e.g., generic names: minutes in ambulatory surgery VA continues to improve methods since study time frame (2001-2002)

39. Health Economics Resource Center39 Improved inpatient procedure reporting New VA mandate that cardiac procedures be recorded as data (not just text)

40. Health Economics Resource Center40 A new way to look into the black box Intermediate Product Department (IPD) Detail –One record with costs incurred in each IPD (Production Unit) during the stay/visit  Gives sum of cost of all products from the department  Does not give quantity or cost of intermediate products –Both inpatient and outpatient files –Located at Austin –Not yet documented –Will allow researchers to estimate cost subtotals

41. Health Economics Resource Center41 Conclusions DSS is excluding “million dollar products” in building the NDE Incomplete data on inpatient procedures may result in significant underestimate of the cost of some hospital stays

42. Health Economics Resource Center42 Recommendations Is accurate estimate of cost of stays involving inpatient procedures important to study? –See DSS IPD extract to see if costs assigned to appropriate intermediate product department

43. Health Economics Resource Center43 Recommendations Alternatives –Use HERC cost estimates as primary, especially if data are several years old. –Conduct sensitivity analysis using HERC estimates –Estimate a cost function with DSS data and use it to simulate missing cost data

44. Health Economics Resource Center44 Alternatives (cont.) Estimate costs using DSS cost function –Estimate cost function  Data: stays that have costs based on appropriate IPD  Independent variables: Use clinical characteristics, LOS, days in ICU, wage index, etc. –Predict costs based on clinical characteristics –In our example, we would have added about $7,400 to cost estimates

45. The Fee Basis (FEE) files Mark W. Smith, PhD Adam Chow, B.A.

46. Health Economics Resource Center46 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

47. Health Economics Resource Center47 Overview of Fee Basis Program Limited emergent care: - no more than 10-day supply of Rx - inpatient only until transfer is medically feasible, typically 3 days or less Full range of services covered

48. Health Economics Resource Center48 Overview of Fee Basis Program Some common uses: Community nursing home care Community nursing home care Home-based care Home-based care –E.g.: long-term oxygen therapy Compensation & pension exams Compensation & pension exams

49. Health Economics Resource Center 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

50. Health Economics Resource Center50 Fee Basis Payments FY2003 Service type Fee Basis Payments Frequency Frequency Inpatient 116,000 stays$ 545 m Non-Rx Outpatient 5,418,000 visits$ 477 m Rx 15,000 scripts$ 0.6 m TOTAL$ 1,023 m

51. Health Economics Resource Center Names of Fee Basis Files - I Hospital stay MDPPRD.MDP.SAS.FEN.FYyy.INPT Ancillary services provided to inpatients MDPPRD.MDP.SAS.FEN.FYyy.INPT.ANCIL Outpatient services MDPPRD.MDP.SAS.FEN.FYyy.MED Payments to pharmacies MDPPRD.MDP.SAS.FEN.FYyy.PHR

52. Health Economics Resource Center Names of Fee Basis Files - II Travel expenses MDPPRD.MDP.SAS.FEN.FYyy.TVL MDPPRD.MDP.SAS.FEN.FYyy.TVL Pharmacy vendor file MDPPRD.MDP.SAS.FEN.FYyy.PHARVEN Other vendors file MDPPRD.MDP.SAS.FEN.FYyy.VEN Veterans with FEE cards (long-term users) MDPPRD.MDP.SAS.FEN.FYyy.VET

53. Health Economics Resource Center53 Highlights of Patient Data Scrambled SSN Primary Service Area (PSA) –3-digit station number County, state, zip

54. Health Economics Resource Center54 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 (*no decimal*)

55. Health Economics Resource Center55 Highlights of Financial Data Amount claimed Amount paid Medicare prospective payment amount (inpatient) Many variable relating to FMS record-keeping: invoice date, processing date, check number, etc.

56. Health Economics Resource Center56 What Data Rows Represent Each row of data represents a service provided for a particular date (outpatient) or time period (inpatient) TREATDT: Outpatient date of service TREATDTF: Inpatient start of invoice period TREATDTO: Inpatient end of invoice period

57. Health Economics Resource Center57 Highlights of Vendor Data Vendor ID Address (city, state, zip) Related VA station number Payment totals by month, not by patient or service

58. Health Economics Resource Center58 Finding Cases Search all relevant variables: –Place of service (PLSER) –Treatment code (TRETYPE) – Purpose of visit (FPOV) Cautions: –Variable values can change year to year –Missing values

59. Health Economics Resource Center59 Creating Discharge Records (1) Goal: Create a single discharge record from multiple inpatient service (INPT) records Method: Concatenate by SCRSSN using TREATDTF and TREATDTO.

60. Health Economics Resource Center60 Creating Discharge Records (2) Records are typically processed within 30 days of invoicing. BUT Invoices may be sent LONG after services are rendered. THEREFORE THEREFORE To find all services in a fiscal year, look in the Fee Basis files in that year and the 2 following years.

61. Health Economics Resource Center61 Creating Discharge Records (3) Searching for records: Outpatient: TREATDT Inpatient: TREATDTF, TREATDTO Inpatient: TREATDTF, TREATDTO Use vendor ID (VENDID) to track particular facilities

62. Health Economics Resource Center62 Creating Discharge Records (4) Cautions –Watch for outliers: extremely long stays –If a stay appears to end on September 30, check the October records –Stays may end with a transfer to VA – look for VA record

63. Health Economics Resource Center63 Other Notes There is repetition across variables: state appears twice, some dates appear in both Julian and SAS formats Blank fields are common. They could mean “not applicable” as well as “missing.”

64. Health Economics Resource Center64 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

65. Health Economics Resource Center65 HERC Technical Report A HERC technical report on Fee Basis data can be found on the HERC web site at http://www.herc.research.med.va.gov/publications/ technical_reports.asp

66. Health Economics Resource Center66 Questions on Fee Basis files?

67. National Prosthetics Patient Database (NPPD) Ciaran Phibbs, PhD Mark W. Smith, PhD Pon Su, MA

68. Health Economics Resource Center68 NPPD Description Contains records of prosthetics dispensed in VA –e.g. glasses, hearing aids, artificial limbs, stents, metal fixtures Data drawn from VISTA and Denver Distribution Center records Available FY1998 – present

69. Health Economics Resource Center69 Selected Variables Patient ID (links to SSN) Location of service HCPCS code & item description Quantity dispensed Cost estimate

70. Health Economics Resource Center70 Additional Notes on NPPD NPPD date refers to the day the record was entered, NOT to date of service! There is no service date. Costs may vary by site due to local contracts. Used items automatically assigned 50% of new cost.

71. Health Economics Resource Center71 NPPD vs. Utilization Files (1) HERC compared NPPD records to major utilization databases: –Outpatient: OPC, DSS NDE –Inpatient: PTF, DSS NDE Purpose: To determine validity of NPPD

72. Health Economics Resource Center72 NPPD vs. Utilization Files (2) Idea: Prosthetics should be dispensed in an encounter that is recorded in a utilization record.

73. Health Economics Resource Center73 NPPD vs. Utilization Files (2) Method –Use date of outpatient NPPD record –Look –30 to +30 days around outpatient visit in NPCD (OPC) for a related clinic stop Result –Only about 50% of records match –Poor correspondence for inpatient records

74. Health Economics Resource Center74 NPPD vs. Utilization Files (3) Result –Only about 50% of records match! –Poor correspondence for inpatient records Potential Causes – Need to use longer window: -30 to +90 days ? – Blind rehab units report using ward stock – not tied to individual patients. tied to individual patients. – Weak incentive for accurate data entry

75. Health Economics Resource Center75 Recommendations NPPD is a work in progress –It does not list every prosthetic –It does not have a service date Potential use: estimating purchase cost of new prosthetic items, locally or nationally

76. Health Economics Resource Center76 References Contents: VIReC Insights 2001;2(3)) Comparison to utilization files: HERC technical report (in progress)

77. Health Economics Resource Center77 Access to NPPD Contacts Frederick Downs, MD (VACO) Liz Kiley, NPPD data manager (Hines) Process Submit request to Frederick Downs with project description, IRB approval, list of variables needed

78. Health Economics Resource Center78 Questions on NPPD files?