Professional Fee Ratios for US Hospital Discharge Data

Area of Science:

• Health economics
• Healthcare data analysis
• Medical billing and reimbursement

Background:

• US hospital discharge datasets commonly exclude professional fees, reporting only facility charges.
• This exclusion limits the accuracy of healthcare cost analyses.
• Professional fees, such as attending physicians' charges, represent a significant component of total healthcare costs.

Purpose of the Study:

• To estimate professional fee ratios (PFR) by year and clinical diagnosis.
• To provide data for more accurate cost analyses using hospital discharge data.
• To quantify the proportion of total healthcare costs attributable to professional fees.

Main Methods:

• Retrospective cohort analysis of 23.6 million inpatient admissions and 70.7 million emergency department (ED) visits from 2004-2012.
• Professional Fee Ratio (PFR) calculated as total payments divided by facility-only payments.
• Ordinary least squares regression models used to calculate adjusted mean PFR, controlling for patient characteristics and stratified by insurance type, year, and clinical classifications (MDC, DRG, CCS, ICD-9-CM).

Main Results:

• In 2012, professional fees increased total payments by an average of 26.4% for commercially insured admissions and 17.7% for Medicaid admissions.
• For 2012 ED visits, PFR was 1.286 for commercially insured and 1.440 for Medicaid.
• Annual PFR estimates from 2004-2012 are available by clinical classifications.

Conclusions:

• Adjustments for professional fees are crucial when utilizing hospital facility-only financial data.
• Accurate healthcare cost estimations necessitate the inclusion of both facility and professional fees.
• This research provides essential data for refining healthcare cost analyses and financial modeling.