|
The American health care system is hemorrhaging red ink at
nearly every level of health care delivery, including hospitals,
outpatient providers, insurers, and integrated health care systems.
Meanwhile, physicians earn less, employers pay higher premiums,
and patients and their political representatives express dissatisfaction
with the service they receive and the underlying quality of their
care. Two decades of unrelenting pressure to deliver more cost-effective
care have put enormous strains on the system while yielding only
limited benefits. What has gone wrong?
In the ongoing reform effort, much attention and many resources
have gone toward encouraging physicians and providers to shift
care as much as possible away from costly inpatient hospital
stays toward less expensive outpatient treatment. Among the most
important metrics for gauging the success of this endeavor is
the hospital length of stay (LOS). The
premise has been that by discharging patients more quickly, hospitals
reduce overall health care costs, even if patients continue to
receive care on an outpatient basis, because such care is assumed
to be less expensive.1
Because of the tremendous attention LOS has received, this
premise represents an obvious starting point for inquiries into
the shortcomings of health care reform. Yet the only evidence
shedding any light on the empiric link between reduced LOS and
cost savings is indirect, and it suggests that the link is weak.
Hospitals are highly capital-intensive
enterprises, and many studies have documented the high administrative
and overhead costs of running them.1-8
The incremental (or "marginal'') cost of admitting one more
patient to a hospital may be much less than the total cost, which
includes overhead. One recent study has shown that in the short
run, the marginal cost of admitting one more patient may be as
little as 13% of the total cost,8 and another report has shown
that the marginal cost of an emergency room visit is only a small
percentage of the total cost.6 These studies call into question
the wisdom behind hospitals' often Herculean efforts to keep
patients out and to strictly ration their care once they are
admitted.
Figures are needed that show precisely how much hospitals
can save by discharging patients sooner. There is some speculation
that the marginal cost of keeping a patient in the hospital 1
additional day is much less than the total cost,7 but there are
no hard facts published anywhere and only limited grounds for
educated guesses. There are good reasons, though, to suspect
that the marginal cost of 1 more day may be remarkably small.
Suppose that the incremental cost of a typical hospital admission
is approximately 40% or less of the total cost and that most
patients incur many more expenses early in their hospital stays
than they do at the end. It follows that the incremental costs
incurred during the last 10% of the average hospital stay must
be well below 4%. But how much less?
Most of the progress that providers have made in reducing
LOS occurred during the mid-1980s, and since then LOS has declined
little despite a continued emphasis on that objective.1 If further
LOS reductions would yield few cost savings and could not be
accomplished without jeopardizing the quality of patient care,
then it is time for providers to look for other avenues to save
money. The purpose of our study is to evaluate the pervasive
belief that health care costs can be curtailed significantly
by reducing hospital LOS.
Introduction | Methods
| Results
| Discussion
| References
JACS |
