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Changes in average length of stay and average charges generated following institution of PSRO review
Abstract:
A five-year review of accounting data at a university hospital shows that immediately following institution of concurrent PSRO admission and length of stay review of Medicare-Medicaid patients, there was a significant decrease in length of stay and a fall in average charges generated per patient against the inflationary trend. Similar changes did not occur for the non-Medicare-Medicaid patients who were not reviewed. The observed changes occurred even though the review procedure rarely resulted in the denial of services to patients, suggesting an indirect effect of review.
Insights
Implementing concurrent utilization reviews for Medicare and Medicaid patients significantly reduced hospital length of stay and charges. This cost-saving measure, involving Professional Standards Review Organizations (PSROs), proved effective even without frequent service denials.
Area of Science:
- Health Services Research
- Hospital Administration
- Healthcare Economics
Background:
- University hospitals face financial pressures and the need for efficient patient management.
- Utilization reviews aim to control healthcare costs and ensure appropriate care.
- Medicare and Medicaid patients represent a significant demographic in hospital admissions.
Purpose of the Study:
- To evaluate the impact of concurrent utilization reviews on hospital resource utilization.
- To assess the effect of Professional Standards Review Organizations (PSROs) on patient length of stay and hospital charges.
- To compare outcomes for Medicare/Medicaid patients versus non-Medicare/Medicaid patients.
Main Methods:
- A five-year retrospective analysis of accounting data from a university hospital.
- Implementation of concurrent PSRO admission and length of stay reviews for Medicare/Medicaid patients.
- Comparison of length of stay and average charges between reviewed (Medicare/Medicaid) and unreviewed (non-Medicare/Medicaid) patient groups.
Main Results:
- A significant decrease in average length of stay for Medicare/Medicaid patients post-review implementation.
- A notable fall in average charges per patient for the reviewed group, contrary to inflationary trends.
- No comparable changes observed in length of stay or charges for non-Medicare/Medicaid patients.
Conclusions:
- Concurrent PSRO reviews can effectively reduce hospital length of stay and associated costs for Medicare/Medicaid patients.
- The positive impact on cost containment may be an indirect effect of the review process, not solely due to service denials.
- Findings suggest utilization review as a valuable tool for healthcare cost management in university hospitals.